Wadia-owned Go First has suspended flights for May 3 and 4 due to pending dues of oil marketing companies.
The airline’s cash flow has been seriously hit as it has grounded more than half of its fleet due recurrent issues and non-supply of engines from Pratt & Whitney engines which powers its Airbus A320 neo aircraft.
The Wadia-group owned airline is looking for a strategic investor in the company and is talking to potential investors.
“The airline is on cash and carry mode meaning it has to pay daily for the number of flights it wants to operate. It has agreed that if there is non-payment, then the vendor can stop business,” an official of an oil marketing company said.
An airline spokesperson didn’t reply to queries on the topic.
Simultaneously, the airline has filed a lawsuit against the US-based engine maker in Delaware federal court seeking enforcement of an arbitral award that asks Pratt & Whitney to provide the airline with engines failing which there is a risk of the airline shutting down. The arbitration award in favour of Go First given on March 30, said that that there was a risk of irreparable harm if emergency engines are not provided.
Go First had 30 aircraft grounded as of March 31, including nine on which the lease payments are due, industry officials said. Go First has a total of 61 aircraft in its fleet – 56 A320neos and five A320ceos, according to the airline’s website.
The loss of passenger revenue comes when airfares are high and traffic is soaring after the pandemic. The airline plans to operate 1,538 flights a week in the ongoing summer schedule, 40 lower than last year. The season started on March 26 and goes on till October 28.
Since July 2022, when it first had to ground its aircraft, Go First's market share has shrunk. Market share narrowed to 8 percent carrying 963,000 passengers in February from a peak of 11.1 percent when it carried 1.27 million passengers in May 2022.
The fall in passengers carried has impacted Go First's financials. The airline reported a net loss of $218 million in FY22, according to regulatory filings. This was twice as much as the previous year’s loss of $105 million.