Go First Extends Flight Cancellation until May 12th

Go First, the Wadia-owned airline has announced that it will be extending the flight cancellation of all its flights until May 12th due to operational reasons. The decision to cancel flights has been made to address ongoing issues related to pending dues, cash flow problems, and engine supply constraints. The airline has expressed its regret for causing inconvenience to passengers and has assured them that it will issue refunds promptly to the original mode of payment.

The airline had initially suspended flights for May 3rd, 4th, and 5th, citing pending dues owed to oil marketing companies. However, with the extension of flight cancellations until May 12th, it is clear that Go First is facing more significant challenges that need to be addressed.

The grounding of more than half of the airline’s fleet due to recurrent issues and the non-supply of engines from Pratt & Whitney has severely impacted Go First’s cash flow. As a result, the company has been struggling to meet its financial obligations and has been operating on a cash-and-carry basis, meaning it had to pay daily for the number of flights it wanted to operate.

Go First

Before its case went to the National Company Law Tribunal (NCLT), Go First had been actively seeking a strategic investor to help stabilize its operations. The airline had 30 aircraft grounded as of March 31st, with lease payments pending on nine of them, according to industry officials. In total, Go First has a fleet of 61 aircraft, including 56 A320neos and five A320ceos.

The timing of these flight cancellations is unfortunate as the airline industry is currently experiencing high airfares and increased passenger traffic following the pandemic. GoFirst had planned to operate 1,538 flights per week during the ongoing summer schedule, which is 40 flights fewer than the previous year. The summer schedule started on March 26th and will continue until October 28th.

The cancellation of flights and the subsequent loss of passenger revenue have had a significant impact on Go First’s financial performance. Regulatory filings indicate that the airline reported a net loss of $218 million in FY22, which is double the previous year’s loss of $105 million. Additionally, the airline’s market share has shrunk since July 2022 when it first faced aircraft grounding. In February, Go First’s market share stood at 8 percent, carrying 963,000 passengers, compared to a peak market share of 11.1 percent in May 2022 when it transported 1.27 million passengers.

Go First is now facing a crucial period as it works towards finding a solution to its operational and financial challenges. The airline’s management and stakeholders will need to address the underlying issues to ensure the long-term viability of the company and regain the confidence of passengers and the industry as a whole.

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