Go First crisis

Customers need to wait longer for refunds. Beleaguered airline Go First could take longer to process flight ticket refunds to customers in the wake of its deepening financial crisis.
The Wadia group-owned airline has already cancelled all flights till May 12, in addition to suspending sale of tickets.
While Go First said it would issue refunds to customers who had already booked tickets, a report suggests that the airline may take at least a couple of weeks before it could start the process.
Go First is expected to request the National Company Law Tribunal (NCLT) and Directorate General of Civil Aviation (DGCA) for some additional time for issuing refunds as it plans to raise necessary funds, reported moneycontrol.com.
A source told the publication that the airline is likely to ask the NCLT for a moratorium to raise money to provide ticket refunds for flights that were cancelled after May 2. In addition, the source said processing refunds could take a couple of weeks.Meanwhile, another source told the publication that Go First’s promoters may look to raise around Rs 200 crore for the refunds as well as to pay all its employees.
Go First’s inability to refund customers even after the DGCA’s directive indicates growing financial hurdles for the airline. The report suggests that Go First would have to make refunds to the tune of Rs 450 crore to Rs 500 crore. In addition to the burden of refunds, Go First has a total liability of over Rs 11,000 crore.Go First has sought the NCLT to urgently accept its insolvency plea as it would offer the airline protection against adverse action by the aviation regulator and aircraft lessors. However, the NCLT is yet to take a decision on the matter.
Go First' financial crisis deepens
Go First faces the risk of getting its air operator’s certificate (AOC) cancelled, while lessors are already pushing hard to repossess aircraft.
While filing its insolvency plea, Go First blamed US aerospace manufacturer Pratt & Whitney for the supply of faulty engines that led to the grounding of more than half its fleet. It also said that Pratt & Whitney has failed to supply engines on time, leading to an acute cash crunch arising from operational hurdles.Go First has said it was forced to cancel flights due as more than half of its fleet was grounded due to the unavailability of spares and spare engines from Pratt & Whitney.
Meanwhile, the Travel Agents Federation of India (TAFI) wrote a letter to Go First, asking it to directly refund the amount for cancelled tickets to agents’ bank accounts, which can be utilized to refund passengers.
“Hundreds of travel agents across the country have placed substantial deposits with your airline in a credit shell to be used for immediate and future bookings and which currently remain unutilized,” TAFI said.