June 01, 2023
- Indian airline Go First, earlier known as Go Air, filed for voluntary insolvency with the National Company Law Tribunal in May and was ordered by the Directorate General of Civil Aviation (DGCA) to stop its sale of tickets.
- Voluntary insolvency is when the shareholders of a company decide to put the company into liquidation by selling its assets, but there aren’t enough assets to pay creditors in full.
- The airline stated that it was forced to take this step due to a severe financial crunch caused by faulty engines supplied by American engine maker Pratt & Whitney.
- Because of the faulty engines, Go First had to ground 25 aircraft, which is 50% of its Airbus A320neo fleet, leading to a loss of over ₹108 billion.
- Kaushik Khona, the chief executive officer of Go First, stated that the insolvency proceedings are aimed at reviving the airline and Wadia Group, the airline’s owners, has no plans to exit it.
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