Go first’s grounding bodes ill for both flyers and industry
Just when air travel is touching pre-pandemic levels providing some cheer to beleaguered airlines around the globe, the Wadia Group airline, Go First, has announced it has temporarily stopped flying. The airline has also filed for insolvency before the National Company Law Tribunal. Trouble has been brewing in the airline for some time, and it has been unable to carry through its public issue to raise funds. The airline has blamed the current crisis on the US engine manufacturer, Pratt & Whitney, who it says has failed to replace defective engines on its A320 Neo aircraft. Grounding around 25 planes, nearly half the fleet, has resulted in a serious cash crunch. The engine maker, however, has refuted Go First’s claims, stating the airline has a long history of missing its financial obligations.
Expectedly, travellers are the first victims. Cancelled Go First flights and the run-around for refunds have left hundreds in the lurch. Other airlines have swooped in to make hay, jacking up prices by 50% or more on significant regional routes like Srinagar and Leh that Go First was servicing. For the consumer, the growing monopoly of just two airlines—Indigo and the now Tata-controlled Air India—does not bode well for competitive pricing and making air travel accessible to all. Go First’s woes again prove that the airline business is a tough nut to crack.
Globally, the pandemic killed 64 airlines worldwide. In India, Jet Airways, grounded since 2019, has got new owners—the Jalan-Kalrock Consortium (JKC)—and a fresh license to fly, but unpaid loans have not allowed the airline to take off. SpiceJet, though operational, is unable to raise funds and continues to teeter on the brink. Over the last two decades, around 11 airlines flying the Indian skies have gone belly up. In FY2022, Go First lost Rs 1,804 crore—more than the net profit the Wadia Group’s four listed companies made in the period. This cannot be an appeal to the government to bail out an airline that has probably mismanaged its own business. However, considering its impact on the airline business, the Centre should consider helping smoothen things out. At a bilateral level with the US, perhaps P&W can be told to prioritise engine replacements so that Go First planes can take to the air again. Hardly any airline that has been grounded has ever flown again. But we hope Go First bucks the trend.