India’s aviation industry has seen another major hit with the Go First Airline filing for bankruptcy, marking the first such incident since Jet Airways‘ bankruptcy in 2019.
In a shocking announcement, it was revealed that the Indian carrier Go First Airline has filed for bankruptcy at the National Company Law Tribunal and has suspended all of its flight operations for the next three days – May 3, 4 and 5.
The suspension of operations has left the airline’s passengers stranded and furious, with many of them having to make alternative travel arrangements at short notice. This has caused considerable inconvenience to the affected passengers, as well as to the travel agents and other stakeholders in the aviation industry.
Expressing concern over the sudden cancellation of the Go First flights, TAAI President Jyoti Mayal stated that it has put the aviation industry in shock.
The sudden flights suspension has put the travel industry in a precarious position and the travel agents fear adverse impacts, she said, adding that this is a significant financial blow as the travel agents community struggles to revive post Covid-19.
The collapse of Go First comes at a time when the industry is grappling with the impact of the Covid-19 pandemic, which has severely affected air travel demand and profitability.
Commenting on the struggles faced by the industry regarding correct procedures and protocols, Mayal shared that it is surprising that a country considered a ‘power centre’ is facing such challenges again and again pertaining to the aviation sector.
Mayal stressed that travel and tourism service providers are a vital part of the growth of this country and the responsibility of the government. While expressing concern that the government is refusing to hear them, Mayal further acknowledged that TAAI has been advocating to the Government of India, Ministry of Aviation, Ministry of Tourism, and the PM himself to ensure the security of the travel industry/consumers, and address airline defaults.
“There is a need to bring policies to safeguard consumers and service provider’s money,” she urged.
Mayal said that association has also been promised by the Ministry of Aviation to establish a National Task Force with airlines and DGCA, but weak policies and governance will impact the opening of multiple airports and make the aviation industry fragile, Mayal pointed out.
TAAI president has once again requested the PM to look into their woes and find a solution to make travel agents a part of the growth and save them from being crippled. “The vision of a trillion-dollar economy cannot be achieved with such setbacks,” she said.
It remains to be seen how the government will address these concerns, as the aviation industry is an essential part of India’s economy and plays a crucial role in its growth.
The impact of Go First’s bankruptcy and the resulting disruptions in the industry is likely to be significant and it is crucial that the government takes proactive steps to address the situation and prevent such occurrences in the future, Mayal reiterated.
The official Go First statement read as, “We regret to inform you that due to operational reasons, Go First flights scheduled for 3rd, 4th and 5th May 2023 have been cancelled. We apologise for the inconvenience. A full refund will be issued through the original mode of payment shortly. We acknowledge the flight cancellations might have disrupted plans and we are committed to providing all the assistance we can.”
The airline, in its official communications, had also mentioned increasing losses as the reason for the decision, blaming it on the delay in receiving Pratt and Whitney engines. As a result of the delay, nearly half of its aircraft fleet has been grounded, which has resulted in major operational and financial difficulties for the airline.
Union Civil Aviation Minister Jyotiraditya Scindia also expressed his disappointment on Tuesday after Go First airline announced the suspension of its flights due to a financial crisis caused by critical supply chain issues with its engines.
Scindia further stated that the government has been providing all possible support to the airline and that the issue has been brought to the attention of the relevant stakeholders. However, he acknowledged that the operational bottleneck has impacted the airline’s financial position.
The minister also noted that the airline has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT) and it is best to allow the judicial process to run its course.
Further, Go First has also been issued a notice by the Directorate General of Civil Aviation (DGCA) on the sudden suspension of flights stating that the airline is responsible for making alternative travel arrangements for passengers to minimise inconvenience.
This sudden collapse of the airline also signifies the intense competition in a sector, which is also forcing the airlines to adopt cost-cutting measures and implement innovative strategies to stay afloat in a challenging business environment.
As the aviation industry continues to evolve, experts predict that further consolidation and restructuring may be on the horizon as airlines seek to survive and thrive in a highly competitive market.