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Go First chief Kaushik Khona has told employees that the airline has been crippled by recurring <keyword id="382682" type="General" weightage="20" keywordseo="Pratt-Whitney" source="Orion">Pratt &amp; Whitney</keyword> engine troubles and assured that the carrier is doing everything possible to navigate the situation with utmost care and concern for all staff. The no-frills carrier has filed an application for voluntary insolvency proceedings and has also cancelled all its flights for three days starting Wednesday. In a message to employees late on Tuesday, Khona said that a terrible crisis has been created by Pratt &amp; Whitney's failure to <keyword id="15312689" type="TOPIC" weightage="60" keywordseo="Supply" source="TOPIC" sourcekeytype="economy,investopedia" meta.keywordsubtype="null" meta.msid="93027566" meta.seopath="s/supply" meta.entityname="Supply" meta.hostid="153" meta.entityid="supply">supply</keyword> engines. For more than 12 months, the airline's management has tried their level best to convince P&amp;W to provide spare engines, repair engines. However, P&amp;W has been stonewalling the discussions, the CEO said, adding that it moved Emergency Arbitration in Singapore. According to the airline, the arbitrator ordered P&amp;W to supply at least 10 serviceable spare leased engines by April 27 and a further 10 spare leased engines per month until December 2023. "With that, the airline would have had all its A320 neo aircraft operational by August/ September 2023... unfortunately, Pratt &amp; Whitney has chosen to defy the order from the Emergency Arbitrator," Khona said in the message. The airline approached the arbitrator, who reinforced the order and since P&amp;W "chose to defy for the second time", it filed enforcement proceedings at a US court seeking implementation of the order, he added. More than half of the airline's fleet is grounded due to engine issues. With a depleted fleet size, Khona said the airline is not able to generate <keyword id="15308831" type="TOPIC" weightage="60" keywordseo="Revenue" source="TOPIC" sourcekeytype="business,investopedia" meta.keywordsubtype="null" meta.msid="92973114" meta.seopath="r/revenue" meta.entityname="Revenue" meta.hostid="153" meta.entityid="revenue">revenue</keyword> for the payment of lessors, and as a result, they are taking coercive steps against the company by invoking letters of credit, grounding notices and demanding return of aircraft. "... The company has been crippled by the recurring Pratt &amp; Whitney engine troubles. Pratt &amp; Whitney's defiance in not supplying spare engines as instructed by the Emergency Arbitrator has ground your company to a halt," he told the staff. Against this backdrop, Khona said there was no other option other than seeking voluntary insolvency resolution proceedings to preserve the company's operations by taking effective steps. Addressing the employees as "Go Getters", the CEO said, "we want to reassure you that we are doing everything possible to navigate this situation with the utmost care and concern for all employees". "I am hopeful that once the application under section 10 of IBC for interim relief is considered, we will be in a better position to update you with a further action plan, as and when we receive orders from NCLT," he added. Section 10 of the Insolvency and Bankruptcy Code (IBC) pertains to voluntary insolvency resolution proceedings and applications in this regard are filed before the National Company Law Tribunal (NCLT). SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/govt-is-positive-centre-to-sc-on-social-benefits-for-same-sex-couples/articleshow/99954180.cms">'Govt is positive', Centre to SC on social benefits for same-sex couples</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/zoom-gets-pan-india-telecom-licence-to-offer-telephone-services-to-enterprise-customers/articleshow/99954326.cms">Zoom gets pan-India telecom licence to offer telephone services to enterprise customers</a>

Doing everything possible to take utmost care of employees says Go First CEO

The <keyword id="6354457" type="General" weightage="50" keywordseo="national-company-law-tribunal" source="Orion">National Company Law Tribunal</keyword> (<keyword id="6355809" type="General" weightage="100" keywordseo="nclt" source="Orion">NCLT</keyword>) on Wednesday admitted Go First's voluntary plea to initiate the insolvency resolution process against the airline. A two-member bench comprising President Justice Ramalingam <keyword id="198622" type="General" weightage="50" keywordseo="sudhakar" source="Orion">Sudhakar</keyword> and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden company. It has also put the company under the protection of a moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings. Besides, NCLT also ordered to keep the company as a going concern and ensure that no employees are retrenched. On May 4, the NCLT reserved its order after hearing the <keyword id="7629" type="General" weightage="50" keywordseo="wadia" source="Orion">Wadia</keyword> group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection. Go First, which has been flying for more than 17 years, stopped flights on May 3 amid a financial crunch caused by the grounding of more than half of its fleet due to non-availability of Pratt &amp; Whitney engines. With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations. Go First has already suspended the sale of tickets till May 15. As many as 28 planes or more than half of the airline's fleet are grounded due to the non-supply of engines by Pratt &amp; Whitney (P&amp;W). The lessors of the carrier have opposed Go First's plea for an interim moratorium contending that it would have "harmful and serious consequences". Besides, Go First is facing two more petitions seeking insolvency proceedings against it. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/tv-audience-is-growing-in-complexity-as-idiot-box-turns-smart/articleshow/100122882.cms">TV audience is growing in complexity as idiot box turns smart</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/mankind-pharma-debuts-in-top-100-as-per-market-value-after-a-stellar-listing/articleshow/100123765.cms">Mankind Pharma enters top 100 companies by market cap after a stellar listing</a>

NCLT admits Go First's plea to initiate insolvency resolution

After Go First filed for bankruptcy blaming jet engine maker Pratt &amp; Whitney (P&amp;W) for grounding half of its fleet, the US aerospace major hit back stating that the budget airline has a "lengthy history of missing its financial obligations." A source at P&amp;W told that the budget airline has a lengthy history of missing its financial obligations to Pratt &amp; Whitney. In a statement the US engine maker said it was "committed to the success of our airline customers, and we continue to prioritise delivery schedules for all customers. P&amp;W 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." On Tuesday, Go First Airlines said that due to the non-supply of engines by Pratt &amp; Whitney operations will remain cancelled. "Go First is facing financial crunch due to non-supply of engines by US-based jet engines manufacturer Pratt and Whitney (P&amp;W) that has forced grounding more than 50 planes," a Go First official told ANI. Amid the confusion, passengers who booked their tickets with the airlines were left in the lurch. Go First Airlines announced that its flight operations will remain cancelled from May 3 to May 5 adding that a full refund will be issued to the passengers. The official media account of Go First Airlines took to Twitter and said, "Due to operational reasons, GoFirst flights for 3rd, 4th and 5th May 2023 have been cancelled. We sincerely apologise to our loyal customers. We assure you that we will be back with more information soon. A full refund will be issued through the original mode of payment shortly". Union Civil Aviation Minister Jyotiraditya Scindia said that the Government of India has been assisting Go First Airlines in every possible manner but it is incumbent upon the airline to make alternative travel arrangements for passengers so that they do not face inconvenience. On Tuesday, India's aviation regulator Directorate General of Civil Aviation (DGCA) issued a show cause notice to India's low-cost carrier Go First Airlines for not providing prior intimation of the cancellation of flights on May 3 and May 4 to DGCA. "It has come to the notice of DGCA that Go First has cancelled all scheduled flights of 3rd May and 4th May 2023, respectively. No prior intimation has been given to DGCA for such cancellations which is non-compliance with conditions for approval of schedule," an official statement issued by DGCA said. DGCA has sought a reply from Go First Airlines within 24 hours of the issuance of the show cause notice. In this regard, Go First Airlines said that due to the non-supply of engines by the US-based Jet engines manufacturer, operations will remain cancelled. In a statement released on Tuesday, Go First had filed an application with the National Company Law Tribunal in New Delhi. In the statement, the budget airline said, "GO FIRST has had to take this step due to the ever-increasing number of failing engines supplied by Pratt &amp; Whitney's International Aero Engines, LLC, which has resulted in GO FIRST having to ground 25 aircraft (equivalent to approximately 50 per cent of its Airbus A320neo aircraft fleet) as of 1 May 2023." The airline said the percentage of grounded aircraft due to Pratt &amp; Whitney's faulty engines grew from 7 per cent in December 2019 to 31 per cent in December 2020 to 50 per cent in December 2022. It said this was despite Pratt &amp; Whitney making several ongoing assurances over the years, which it repeatedly failed to meet. The budget airline said it was forced to apply to the NCLT after Pratt &amp; Whitney, the exclusive engine supplier for GO FIRST's Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC). "That order directed Pratt &amp; 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," the airline said, adding, "a further 10 spare leased engines per month until December 2023, with the objective of GO FIRST returning to full operations and achieving GO FIRST's financial rehabilitation and survival." The airline said, "If Pratt &amp; Whitney were to comply with the orders in the emergency arbitrator's award, GO FIRST would be able to return to full operations by August/September 2023." SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/adani-total-gas-reports-8-rise-in-fy23-net-profit-to-546-croreannounces-plans-to-expand-ev-charging-points-to-3000/articleshow/99936234.cms">Adani Total Gas reports 8% rise in FY23 net profit to ₹546 crore, announces plans to expand EV charging points to 3,000</a> <a href="https://www.businessinsider.in/business/auto/news/april-auto-sales-maruti-suzuki-flags-decline-in-bookings-in-april-electric-two-wheelers-lose-momentum-due-to-fame-ii-irregularities/articleshow/99927888.cms">April Auto Sales: Maruti Suzuki flags decline in bookings in April, electric two-wheelers lose momentum due to FAME-II irregularities</a> <a href="https://www.businessinsider.in/stock-market/news/fpis-pump-11631-crore-in-indian-equities-in-april-rupee-appreciation-gives-a-boost/articleshow/99901465.cms">FPIs pump ₹11,631 crore in Indian equities in April, rupee appreciation gives a boost</a>

Go First has lengthy history of missing financial obigations, says Pratt & Whitney official

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Doing everything possible to take utmost care of employees says Go First CEO

PTI

NCLT admits Go First's plea to initiate insolvency resolution

PTI

Go First has lengthy history of missing financial obigations, says Pratt & Whitney official

ANI

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