It was only a few days ago that India's Aviation Minister Jyotiraditya Scindia tweeted about the skyrocketing domestic airline passenger traffic post-Covid and related it to the country's high growth.
On April 30, India reached a milestone as domestic air traffic hit a record high with 4,56,082 passengers and 2,978 flights taking off on a single day. Days later, a domestic airlines carrier, Go First, filed for bankruptcy after suspending flights for days due to a lack of cash.
भारतीय नागर विमानन क्षेत्र नित नए कीर्तिमान स्थापित कर रहा है - कोविड-उपरांत, आसमान छूती घरेलू हवाई यात्रियों की संख्या भारत के बढ़ते विकास और समृद्धि का संकेत है। pic.twitter.com/Iobij1asnk— Jyotiraditya M. Scindia (@JM_Scindia) May 1, 2023
Go First, owned by the Wadia Group, filed for involuntary solvency on May 2, Tuesday, marking the first major airline collapse in India since Jet Airways in 2019. Several flights were cancelled without any notice much to the frustration of passengers. Go First has promised to refund the ticket expenses to passengers.
#WATCH| Delhi: "I left Meerut around 3 am, but after reaching here I got to know that my flight has been cancelled...no one is ready to say anything clearly..": Harender Singh, a passenger who booked his ticket with Go First Airlines— ANI (@ANI) May 3, 2023
Go First Airlines grounded its flights for… pic.twitter.com/rXNCeu38Kg
Below is a statement from Go First Airlines regarding cancelled flights. It is not known whether Go First will operate flights once again post-May 5.
Due to operational reasons, GoFirst flights for 3rd, 4th and 5th May 2023 have been cancelled. We sincerely apologise to our loyal customers. Please visit https://t.co/qRNQ4oQROr for more information. We assure that we’ll be back with more information soon. #GoFirst pic.twitter.com/QAJlL017QS— GO FIRST (@GoFirstairways) May 2, 2023
Following the cancellation of flights, the Directorate General of Civil Aviation (DGCA) issued a show-cause notice to the airline.
Directorate General of Civil Aviation (DGCA) issues a show cause notice to Go First after the airline cancelled fresh bookings from 3-4 May. pic.twitter.com/ItCLwetWb1— ANI (@ANI) May 2, 2023
Read below to understand what Go First's fall means for the aviation industry in India and regular flyers.
Pratt and Whitney hit back saying that Go First has a "lengthy history of missing its financial obligations" to the engine supplier. P&W also said that it is prioritising the delivery of engines to Go First in compliance with a March 2023 emergency arbitration.
"Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. Pratt & Whitney is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not… pic.twitter.com/emokTR20ts— ANI (@ANI) May 3, 2023
Go First said that it was supposed to receive spare leased engines in part by April 27 and then again later in December 2023, but did not receive them. The Airline also said that if P&W were to honour the arbitration then it would be able to resume operations by August/September 2023.
Reuters reported that in February 2023, Raytheon Technologies which owns Pratt & Whitney had acknowledged there were "reliability issues" with its GTF engines. Furthermore, Go First's statement claimed that even the Singapore International Arbitration Centre (SIAC), which ruled on the emergency arbitration, found that Go First's current financial position was partly due to its grounded aircraft resulting from the unavailability of P&W engines.
#GoFirst has been faced with critical supply chain issues with regard to its engines. The GoI has been assisting the airline in every possible manner. The issue has also been taken up with the stakeholders involved. Yet, it is unfortunate that this operational bottleneck has… pic.twitter.com/ozuVSENJRA— ANI (@ANI) May 2, 2023
The financial pains of Indian airlines go deeper than a non-supply of engines. Go First's bankruptcy exposes the ills that plague the Indian aviation industry where traditionally most airlines have always struggled to make a profit and stay afloat and where there's a lot of investment also riding (read: Tata-owned Air India's massive aircraft order).
The Indian aviation industry is plagued by a combination of economic policies and demand that include keeping airfares as cheap as possible, while fuel costs remain high with taxes adding on to it.