Go First (GOW, Mumbai International) has filed for insolvency at the National Company Law Tribunal in Delhi, blaming “Pratt & Whitney’s defective and failing engines” for a cash-flow crisis, it said in a two-page statement on May 2. According to local media, it has suspended its flights for May 3 and 4.

The low-cost carrier said it had filed an application with the tribunal to enter the Corporate Insolvency Resolution Process under section 10 of India’s Insolvency Bankruptcy Code. It has also taken the step of suing the engine maker for INR80 billion rupees (USD977.2 million) in damages at the Singapore International Arbitration Centre (SIAC), it said.

An “ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines” has resulted in Go First having to ground 25 aircraft, or about half of its Airbus A320neo fleet, as of May 1, it said, adding that the percentage of aircraft grounded for this reason had grown from 7% in December 2019 to 31% in December 2020 to 50% in December 2022.

According to the ch-aviation fleets module, Go First currently operates a fleet of 55 aircraft, namely five A320-200s, all of which are active, and fifty A320-200Ns, only twenty-two of which are active. Pratt & Whitney’s PW1127G-JM engines power all of the neo fleet.

Go First’s owner Wadia Group revealed last month that it was searching for a strategic partner to buy a minority stake in the beleaguered airline while pledging to invest a further INR3 billion (USD36.6 million). The carrier posted its biggest annual loss in 2022.

Pratt & Whitney “has repeatedly failed to meet” its assurances related to the engines over the years, Go First said. In particular, the airline said, it had refused to comply with an award issued by an emergency arbitrator appointed in accordance with the arbitration rules of the SIAC.

That order directed the American aerospace manufacturer “to take all reasonable steps to release and dispatch without delay to Go First at least 10 serviceable spare leased engines by 27 April 2023 and a further 10 spare leased engines per month until December 2023,” with the objective of the carrier returning to full operations and assuring its survival.

If Pratt & Whitney were to comply, the airline would be able to return to full operations by August or September. Yet it “has failed to provide any further serviceable spare leased engines at all, and has stated that there are no further spare leased engines available.”

Go First has filed for insolvency to protect the interests of all stakeholders, it said, despite their infusion of INR32 billion (USD391 million) over the last three years, including INR2.9 billion (USD35 million) in April 2023 alone.

The grounding of half of its A320neo fleet “due to the serial failure of Pratt & Whitney’s engines” has set the carrier back INR108 billion (USD1.32 billion) in lost revenue and additional expenses, it claimed. It has paid INR56.57 billion (USD691 million) to lessors in the last two years, it added.

It is to recover these losses that it is seeking compensation. If successful, “it is hoped that Go First will be able to address the liabilities of its creditors, small and large. However, at this stage, in the absence of Pratt & Whitney not providing the required number of spare leased engines in accordance with the order issued by the emergency arbitrator, Go First is no longer in a position to continue to meet its financial obligations.”

Pratt & Whitney did not immediately respond to a request for comment from ch-aviation. However, it released a statement which the Times of India published on May 3: “Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritise delivery schedules for all customers. PW is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further.”