GoFirst suspends bookings for May 3-4 and files for bankruptcy amid cash crunch

The budget carrier has filed for bankruptcy before the NCLT to protect the interests of the company, said its CEO Kaushik Khona.

New Delhi: Troubled budget air carrier GoFirst has approached the NCLT seeking bankruptcy resolution owing to a severe cash crunch that forced the airline to decline bookings for May 3 and 4, said CEO Kaushik Khona.

The decision was forced by the grounding of its existing aircraft which has Pratt & Whitney engines. The non-supply of new P&W engines led to the grounding of 28 new aircraft by the airline, Khona said.

Earlier, the airline stopped taking bookings for May 3 and 4 owing to a cash crunch which made it impossible to pay fuel providers, the Economic Times reported.

The Wadia Group-owned airline was on the lookout for investors. The air carrier has been facing liquidity issues for a while with reported delays in salary payments over the past few months. The company employs around 5,000 employees.

The airline operates on a cash-and-carry basis when it comes to dealings with fuel suppliers. This means that ash shortage prevents GoFirst from operating flights.

The airline had earlier filed a lawsuit against P&W in a US court seeking arbitral award. In the vent of non-delivery of engines, the airline stared at the prospect of shuttering, the ET reported.

The court in an arbitral award observed that non-provision of emergency engines would lead to irreparable harm to the budget carrier.

GoFirst’s fleet comprises 61 aircraft of which five are A320ceos while the remaining are A320neos.

Lease payments were due on nine of the airline’s grounded aircraft, the TE reported citing people familiar with the matter.

The airline has witnessed a gradual decline in the share of air passenger traffic, with numbers declining to 963,000 pax in February, or 8 per cent of market share, compared to 11.1 per cent share in May last year with 1.27 million passengers.

In the financial year 2021-22, the Wadia Group-owned air carrier’s net loss doubled to $218 million from a $105 million loss reported during the year-ago period.