Wadia Group promoted airline Go First has filed for insolvency resolution before the National Company Law Tribunal (NCLT) Delhi, citing financial difficulties caused by the grounding of 50 percent of its fleet due to "faulty engines" from the United States-based company Pratt & Whitney.
The airline also suspended all flights for three days from May 3 to May 5, prompting the aviation regulator DGCA to issue a show cause notice. The DGCA has directed Go First to submit details of the steps taken to address the inconvenience caused to passengers due to the cancelled flights and a plan of action to resume operations as per the approved schedule from May 5, 2023, onwards. (Image: Shutterstock)
Go First joins a list of other Indian airlines that have gone out of business over the years, including once-big names like Jet Airways and Kingfisher Airlines.
Jet Airways | On April 17, 2019, the full-service airline Jet Airways grounded its last flight from Amritsar to Mumbai due to severe financial difficulties and banks unwilling to extend further credit. This left a fleet of 119 aircraft reduced to just five and caused travel disruptions and refund delays for hundreds of passengers. Nearly 16,000 jobs were impacted after the shutting down of operations by Jet Airways, according to reports.
Despite efforts to revive the airline, including the formation of Jet Airways 2.0 and its acquisition by the Jalan-Kalrock consortium, an impasse with lenders has persisted, leading to the recent resignation of CEO Sanjiv Kapoor. As the company's ability to resume operations and make payments is at stake, Kapoor's resignation comes as the latest setback in these ongoing negotiations. His notice period ended on May 1. Jet Airways was founded by Naresh Goyal and it started commercial operations in May 1993.
Kingfisher Airlines | Kingfisher Airlines started commercial operations in 2005 and held a 50 percent stake in low-cost airline Kingfisher Red through its parent company, United Breweries Group. However, it faced continuous losses since its inception and accumulated substantial debts, leading to its shutdown on October 20, 2012. The chairman, Vijay Mallya, allegedly fled to London to evade creditors. The State Bank of India, the primary lender to Kingfisher Airlines, declared that it would not consider granting any further loans to the company until it generates new equity on its own. (Image: Shutterstock)
According to reports, SpiceJet plans to bring back 25 grounded planes with government support, amid Go First's bankruptcy. The low-cost carrier has secured around Rs 400 crore through the Emergency Credit Line Guarantee Scheme to finance the revival costs, which is expected to improve the airline's cash inflow and revenue.