{"id":93812,"date":"2023-05-05T00:43:11","date_gmt":"2023-05-05T00:43:11","guid":{"rendered":"https:\/\/tahrir2day.com\/news\/2023\/05\/05\/go-first-what-went-wrong-with-indian-airline\/"},"modified":"2023-05-05T00:43:11","modified_gmt":"2023-05-05T00:43:11","slug":"go-first-what-went-wrong-with-indian-airline","status":"publish","type":"post","link":"https:\/\/tahrir2day.com\/news\/2023\/05\/05\/go-first-what-went-wrong-with-indian-airline\/","title":{"rendered":"Go First: What went wrong with Indian airline?"},"content":{"rendered":"
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At India’s busy airports, airline counters are conspicuously empty.<\/b><\/p>\n<\/div>\n

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Earlier this week, the low-cost airline Go First applied for bankruptcy protection and canceled its flights for a few days. While the airline has promised customers refunds, its agents are busy taking calls from angry passengers. <\/p>\n<\/div>\n

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The chaotic scenes bring back memories of 2019 when Jet Airways, India’s largest airline at the time, went bankrupt. Go First is the first major Indian airline to follow Jet in four years.<\/p>\n<\/div>\n

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  • Air India: The legendary Maharaja returns home <\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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    The National Company Law Tribunal heard its bankruptcy lawsuit Thursday – the airline has asked the court for preliminary orders to allow its operations and also for restrictions on adverse regulator action. However, the tribunal said there was no provision to grant interim relief under the rules. <\/p>\n<\/div>\n

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    Go First says its troubles aren’t due to financial mismanagement, but to engine problems. The company states in its bankruptcy filings that it has never missed a single debt repayment deadline.<\/p>\n<\/div>\n

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    It has accused US engine manufacturer Pratt & Whitney of grounding many of its planes “due to the ever-increasing number of engine failures” – which the airline says has caused a serious liquidity problem.<\/p>\n<\/div>\n

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    Go First says it was forced to ground 25 planes – about half of its fleet of Airbus A320neo planes – resulting in about 108 billion rupees ($1.3 billion; \u00a31 billion) in revenue and expenses led. Go First was scheduled to operate 6,225 flights in May, equivalent to over 1.1 million seats, according to aeronautical analysis firm Cirium.<\/p>\n<\/div>\n

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    The airline has accused Pratt & Whitney of failing to comply with an emergency arbitrator’s order that included the delivery of “at least 10 serviceable leased spare engines by April 27, 2023.”<\/p>\n<\/div>\n

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    Pratt & Whitney said in response that it “complies with the March 2023 award” and could not comment further because “this is now a matter of litigation.”<\/p>\n<\/div>\n

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    • The breakdowns plague India’s low-cost airline<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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      Around 90% of Go First’s fleet consists of A320neos with Pratt & Whitney engines. <\/p>\n<\/div>\n

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      Since 2020, the aircraft have been grounded due to unavailability of spare parts and a delay in the delivery of retrofitted engines from the engine manufacturer. The unavailability of almost half of the fleet impacted flight schedules and resulted in frequent cancellations. <\/p>\n<\/div>\n

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      Go First was the 5th largest airline in India based on scheduled departures. Management said the airline’s owners – the Wadia Group – have no plans to exit. The bankruptcy process is aimed at reviving the airline, not selling it, Go First CEO Kaushik Khona told Reuters.<\/p>\n<\/div>\n

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      The Indian aviation sector has grown rapidly. But several airlines have also been grounded or forced to consolidate due to financial hardship from increased competition, excessive debt and rising costs – Jet Airways, Kingfisher Airlines, Air Deccan, Paramount Airways and MDLR airlines to name a few . <\/p>\n<\/div>\n

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      Despite approvals, Jet Airways has not yet been able to resume operations due to lengthy insolvency proceedings.<\/p>\n<\/div>\n

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      Mark Martin, founder and CEO of aviation consultancy Martin Consulting, says this is the first time an India-based airline has collapsed due to a component supply issue.<\/p>\n<\/div>\n

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      • India’s Go First cancels flights after bankruptcy<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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        Go First says it was a consistently profitable airline with a phased expansion strategy into 2020, when it was hit by serial engine failures. <\/p>\n<\/div>\n

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        The deterioration in the company’s financial performance was also exacerbated by the pandemic that hit air travel, the company said in its bankruptcy filing.<\/p>\n<\/div>\n

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        Some of Go First’s leased aircraft have been repossessed by leasing companies for failure to pay rental fees. Oil marketers had been looking for an instant payment model, and as revenues dwindled, they found it difficult to make daily payments for fuel.<\/p>\n<\/div>\n

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        Despite consistent investment by the Wadia Group – Rs 32 billion over three years – and an emergency government credit line (set up to help businesses deal with the impact of the pandemic), the airline’s operations ground to a halt.<\/p>\n<\/div>\n

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        The collapse of Go First underscores fierce competition in the country’s aviation sector, which has seen one of the strongest post-pandemic air travel recoveries.<\/p>\n<\/div>\n

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        Domestic airlines carried more than 37.5 million passengers in the first three months of 2023, up 51.7% from a year ago. <\/p>\n<\/div>\n

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        According to the CAPA Center for Aviation, India’s domestic air traffic is projected to increase to 350 million passengers by 2030.<\/p>\n<\/div>\n

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        The Go Air crisis could help rivals like IndiGo, Air India, SpiceJet, and new entrants like Akasa Air grab a bigger chunk of market share. <\/p>\n<\/div>\n

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        But customers won’t have such a good time. Fares on Go First routes are expected to increase by up to 50-60% over the next three to four months, Mr Martin estimates. <\/p>\n<\/div>\n

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        \u201cIf Go First closes, more than 50 planes will be grounded. Other airlines have also been hit. The demand is quite high and the existing airlines don’t even have the capacity to meet it,” he says.<\/p>\n<\/div>\n

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        Experts say the industry will also face problems in the engine and aircraft supply chain.<\/p>\n<\/div>\n

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        IndiGo, the country’s largest airline by market share, was also affected by Pratt and Whitney’s engine margin. <\/p>\n<\/div>\n

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        Between IndiGo and Go First, 60 planes were grounded for lack of spare parts. But IndiGo is in a better position, having a fleet of more than 250 aircraft, many of which are powered by other engines.<\/p>\n<\/div>\n

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        SpiceJet is struggling financially, posting huge losses every quarter. It has also been plagued by an unusually high number of obstacles over the past year, which have been closely watched by the airline’s regulator. <\/p>\n<\/div>\n

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        However, the overall growth story of the Indian aviation market is still intact and is mainly driven by two or three players, according to experts.<\/p>\n<\/div>\n

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        In November, the country’s second and third largest airlines – Air India and Vistara – announced their intention to merge. In February, Air India also set a world record by ordering 470 aircraft from Airbus of Europe and Boeing of the US.<\/p>\n<\/div>\n

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        BBC News India is now on YouTube. <\/i>Click here to subscribe to and view our documentaries, explainers, and features.<\/i><\/p>\n<\/div>\n

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        \n
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          At India’s busy airports, airline counters are conspicuously empty. Earlier this week, the low-cost airline Go First applied for bankruptcy protection and canceled its flights for a few days. While the airline has promised customers refunds, its agents are busy taking calls from angry passengers. The chaotic scenes bring back memories of 2019 when Jet […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[45],"tags":[],"class_list":["post-93812","post","type-post","status-publish","format-standard","hentry","category-business"],"yoast_head":"\nGo First: What went wrong with Indian airline? - Tahrir News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tahrir2day.com\/news\/2023\/05\/05\/go-first-what-went-wrong-with-indian-airline\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Go First: What went wrong with Indian airline?\" \/>\n<meta property=\"og:description\" content=\"At India’s busy airports, airline counters are conspicuously empty. 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