Go First, India’s third-largest budget airline, has been forced to apply for voluntary insolvency resolution proceedings due to a shortage of spare engines from US firm Pratt & Whitney, resulting in the grounding of 50% of the fleet. The airline has been plagued by the failure of Pratt & Whitney’s International Aero Engines LLC for a while, causing grounding to rise from 7% in December 2019 to 31% in December 2020 and now to 50% in December 2022. The airline filed an application with the National Company Law Tribunal (NCLT) Delhi for resolution under Section 10 of the Insolvency Bankruptcy Code (IBC). The airline has invested INR 3,200 crores by promoters and received support from the Government of India’s Emergency Credit Line Guarantee Scheme. The grounding of nearly 50% of the A320neo aircraft has caused great inconvenience to its customers, travel partners, creditors, and suppliers, and its own employees.
Among other things, the emergency arbitrator ordered Pratt & Whitney 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.Based on this statement, it seems that GO FIRST and Pratt & Whitney were involved in an arbitration process, and an emergency arbitrator issued an order to Pratt & Whitney to release and dispatch spare leased engines to GO FIRST. The order required Pratt & Whitney to release at least 10 serviceable spare leased engines to GO FIRST by 27 April 2023, and an additional 10 spare leased engines per month until December 2023. This suggests that GO FIRST may have had a shortage of spare engines and sought to resolve the issue through arbitration.
