DGCA asks cash-strapped GoFirst to refund customers; bookings still available on OTAs

Pratt & Whitney said that Go First has a history of missing financial obligations. The US engine manufacturer refused to divulge more details, saying the matter is sub judice.

India’s civil aviation regulator, the Directorate General of Civil Aviation (DGCA) has asked cash-strapped airline GoFirst to refund passengers, who have booked tickets for cancelled or suspended flights.

This comes after the Wadia Group-owned airline filed a voluntary insolvency petition citing a severe cash crunch and cancelled all its flights till May 15. However, it is working to refund or reschedule for future dates, as per the notice.

“DGCA has examined the response of Go First and has issued an order under the prevailing regulations directing them to process the refunds to passengers as per the timelines specifically stipulated in the relevant regulation,” the notice read.

On May 2, domestic budget carrier Go First announced that it has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), Delhi.

The announcement was made by the airline’s CEO Kaushik Khona shortly after the Wadia Group-owned carrier said it will temporarily suspend flight operations on May 3 and 4 due to a "severe fund crunch". The flights will be restarted once the NCLT admits the application, Khona said.

Explaining why it is facing a fund crunch, Khona told news agency PTI that the airline has grounded 28 planes, which is more than half of its fleet, due to the non-supply of engines by Pratt & Whitney (P&W).

The loss-making airline said in a statement: “Go First has had to take this step due to the ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, LLC, which has resulted in Go First having to ground 25 aircraft (equivalent to approximately 50 percent of its Airbus A320neo aircraft fleet) as of 1 May 2023. The percentage of grounded aircraft due to Pratt & Whitney’s faulty engines has grown from 7 percent in December 2019 to 31 percent in December 2020 to 50 percent in December 2022. This is despite Pratt & Whitney making several ongoing assurances over the years, which it has repeatedly failed to meet.”

Moreover, the airline has sought an interim moratorium as the Delhi chapter of the National Company Law Tribunal (NCLT) began hearing its voluntary insolvency plea on May 4. GoFirst has argued that it sees a big scope for revival and that a moratorium was needed as its only assets were the aircraft.

GoFirst also reiterated that the airline's aim is revival given the future of 7,000 direct and 10,ooo indirect employees.

Bookings available on OTAs

Go First flights continue to be available on online travel platforms which is adding to the ordeal of the fliers, who are confused if the flights are operational or whether their bookings will get cancelled. Moneycontrol reached out to travel platforms including EaseMyTrip and Thomas Cook but the OTAs have declined to comment. Cleartrip said that they will be unable to comment as the situation is still evolving.

"We have started the backend process of removing Go First flights from our booking page. Go First flights should stop reflecting on our website in a few hours, the backend process takes 4-5 hours to reflect," said an official from Yatra.com.

On the other hand, an official of a travel platform said, "While Go First has paused its operation, they have not stopped their services. Hence, OTAs are not delisting the Go First flights. As the airline is still functional the bookings are still available on travel platforms. GoFirst is also constantly changing its stance on the suspension of its flights. In the next couple of days, when there is more clarity on what the airline is planning to do OTAs will start the de-listing process."

Bookings made via Thomas Cook on April 28 for a flight on May 6 between Mumbai to Bengaluru were cancelled and the airline communicated the same via mail and message. "Dear GO FIRST Flyer! Your booking ref:(P63IQV) (06May'23), (G8-317) (BOM-BLR) is cancelled due to operational reasons. We sincerely regret the inconvenience caused. You may visit our Website-https://flygofirst.com/Gonxt/ to make amendments to your bookings or call us on 1800 2100 999/ 022 6896 8300 upto 2 hrs prior to your flight departure for any further assistance -Team Go First," the message read.

While the refund for the above-mentioned flight has been processed, it will take around 30 days for the money to be transferred to the account, said the person who made the booking. An official looking at corporate bookings of a company said that they have already received four reschedule requests for GoFirst flights which were cancelled.

It is a challenging time for both travellers and industry players, said Chirag Gupta, Founder & CEO, Deyor, a travel technology company.

"It is crucial that OTAs act with urgency and empathy. The last thing we want is for customers to experience further distress or inconvenience, which is why we need to ensure that all platforms are updated promptly to reflect the current status of flights," he said.

There should be proactive communication with customers and there is a need for transparent policies and processes that can assist fliers in managing their bookings, he said.