Pratt & Whitney Responds After Go First Says Non-Delivery Of Engines Led To Bankruptcy

A US-based aerospace manufacturer, Pratt & Whitney (P&W), has been accused by a financially troubled airline for its bankruptcy declaration on Tuesday. The airline pointed fingers at P&W as the source of its financial difficulties.

P&W has since rebutted Go First‘s statement, alleging that the budget airline has a history of not fulfilling its financial responsibilities. Pratt & Whitney responded on Wednesday, indicating that it is complying with the arbitration ruling relating to the airline and remains committed to fulfilling delivery schedules for all of its clients. This announcement follows Go First’s decision to initiate voluntary insolvency resolution proceedings, cancel flights for three days starting on May 3, and notify the aviation ministry that it is unable to fulfil its financial obligations due to the unavailability of Pratt & Whitney engines.

P&W did not provide specific information on the nature of the airline’s financial obligations that were not met. However, Go First announced on Tuesday that it has opted to undertake voluntary insolvency proceedings due to a severe shortage of cash. The airline stated that P&W’s failure to provide it with engines was the catalyst for this drastic step. Pratt & Whitney has responded to allegations by India’s low-cost carrier, Go Airline (India) Limited, owned by the Wadia group, that squarely pinned the blame for its financial woes on the American firm and prompted the airline to seek bankruptcy protection.

On Tuesday, Go First announced that it has been left with no choice but to initiate legal proceedings against P&W with the National Company Law Tribunal (NCLT) due to the latter’s non-compliance with the emergency arbitration directive from the Singapore International Arbitration Centre (SIAC). The airline has been grappling with engine troubles since January 2020.

Go First stated that the arbitrator had issued an order requiring P&W to exert all commercially reasonable efforts to furnish and transport a minimum of 10 fully operational spare leased engines to the airline by April 27, followed by an additional 10 spare leased engines each month until December 2023. Go First added that had P&W complied with the prescribed conditions, the airline would have been able to fully resume its operations by August/September 2023, thus ensuring the company’s survival and financial revival.

In 2011, Go First placed an order for 72 A320 neo-narrow-body aeroplanes, which were subsequently delivered in 2016. The sole supplier of engines for the A320 Neo fleet is Pratt & Whitney, which was selected by the airline based on their superior fleet management terms and the engines’ greater fuel efficiency, quieter operation, and easier maintenance compared to competitor CFM International.

Despite the $10 billion investment in Pratt & Whitney’s GTF engines, issues with the combustion chamber lining, oil seal, and fan blades have been discovered. These problems resulted in numerous A320 neo aircraft being grounded in 2017 due to technical glitches, causing Go First and IndiGo to cancel multiple flights and ground a considerable number of their aircraft fleet.

As per reports from Go First, Pratt & Whitney has agreed to compensate the airline for its engine support, covering the years up to 2019. The specific amount of the payment made by the engine manufacturer to the airline during the days when the jets were grounded has not been disclosed. However, in 2020, the airline encountered more severe engine breakdowns. In 2022, financial disputes between the two companies surfaced.

In February of this year, Pratt & Whitney proposed to provide replacement engines at a rate that is four times lower than the failure rate. However, a month later, Go First filed for urgent arbitration in Singapore. Despite the engines’ failure to perform as expected, Pratt & Whitney refuted any claims of defects. They stated that Go First is responsible for its own financial troubles and will receive $100 million from the airline as compensation.

Go First has announced that it has been forced to take action due to a significant rise in the number of engine failures among the aircraft supplied by Pratt & Whitney’s International Aero Engines, LLC. This unfortunate situation has resulted in the grounding of 25 aircraft, which equates to around 50% of the Airbus A320neo fleet operated by Go First, as of 1st May 2023.

Pratt & Whitney’s faulty engines have caused the percentage of grounded aircraft to increase from 7% in December 2019 to 31% in December 2020, and ultimately to 50% in December 2022. Despite the company’s repeated assurances over the years, it has failed to deliver on its promises, and this trend continues. However, Pratt & Whitney has yet to provide any additional serviceable spare leased engines and has cited a lack of available spare leased engines as the reason for its inability to comply with the emergency arbitrator’s award at this time.

Proofread and Published By Naveenika Chauhan