Cash-strapped Go First Airways suspends flights for May 3, 4; here's why
Speaking to a news agency, an OMC official said that the budget airline operates on a cash-and-carry model, meaning it must pay OMCs daily for each flight and they can stop business if payments are not made.
FollowGo First chief Kaushik Khona on Tuesday (May 2) said it has cancelled all flights for May 3 and 4 due to a financial crisis at the domestic airline. It is reportedly said that the airline lacked funds to pay oil marketing companies (OMCs) their dues.
Speaking to a news agency, an OMC official said that the budget airline operates on a cash-and-carry model, meaning it must pay OMCs daily for each flight and they can stop business if payments are not made.
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Meanwhile, Go First is seeking to raise funds and owners the Wadia Group are in talks to either sell a majority stake or exit the company completely. The airline posted its biggest annual loss in fiscal 2022.
Of late, the cash-strapped airline has grounded over half its 61-plane fleet due to recurrent financial issues and the non-supply of engines from American manufacturer Pratt & Whitney, which powers its Airbus A320 Neo planes.
The airline has sued Pratt & Whitney in a US federal court seeking to enforce an arbitral award directing the engine maker to supply the engines as contracted.
The grounded flights led to Go First's market share falling to 6.9 percent in March from 8.4 percent in January, according to the Indian aviation regulator.
