Go First moves Delaware court to enforce Pratt & Whitney arbitration award

Go First is the second airline in India to be grounded since 2019

Low-cost carrier Go First, which filed for insolvency before the National Company Law Tribunal (NCLT) on May 2, has also moved a plea before a court in Delaware, United States, seeking enforcement of an order issued by the Singapore International Arbitration Commission (SIAC) against American aerospace manufacturer Pratt & Whitney.

Go First, in the emergency petition moved before the Delaware Federal Court on April 28, called for a legal order to force Pratt & Whitney to comply with SIAC's two arbitral awards, issued on March 30 and April 15.

"If Pratt does not immediately comply with the awards, there is a significant risk that Go First will go out of business and be forced to declare bankruptcy," the petition stated.

"As the award recognized, Go First requires a minimum of 103 engines from Pratt for normal operations, yet only approximately 56 currently are serviceable," the airline further added.

Also Read | Go First insolvency: What does it mean for Indian aviation?

The SIAC had, on March 30, ordered Pratt & Whitney to provide Go First with at least 10 serviceable engines by April 27, 2023, and the remainder by the year-end.

After Pratt & Whitney refused to comply, the SIAC on April 15 issued a second arbitral award, asking the US-based company to comply with its order.

Pratt & Whitney, however, has still refused to adhere to the order and had committed to supply Go First with only three serviceable engines by May-end, the airline said.

"The court should recognize the awards due to Go First's dire need for immediate confirmation and enforcement, without which Go First faces irreparable harm, and absent which the emergency arbitration would be rendered meaningless," the petition further added.

The series of charges which Go First levelled against Pratt & Whitney before the Delaware court include the supply of defective GTF (geared turbofan) engines, failure to repair the unserviceable engines, and failure to provide sufficient spare leased engines, among others.

On May 2, four days after filing its plea in the Delaware court, the Mumbai-headquartered aviation company approached the NCLT with its insolvency plea. The airline squarely blamed Pratt & Whitney for its weak financial health, which has made it incompatible to meet the financial obligations for the day-to-day operations.

"Go First has been forced to apply to the NCLT because of the recurring and persistent issues with the GTF (geared turbofan) engines supplied by Pratt & Whitney, coupled with Pratt & Whitney’s failure to repair those engines and/or provide sufficient spare leased engines as it was required to do pursuant to its obligations under the relevant agreements," it said in a statement.

According to Go First, the number of grounded aircraft due to the engine issue increased from 7 percent of its fleet in December 2019 to 31 percent in December 2020 and 50 percent in December 2022. This in turn resulted in a revenue loss of around Rs 10,800 crore, it claimed.

The additional consequence of Pratt & Whitney’s actions has also "driven some lessors to repossess aircraft, draw down letters of credit and notify further withdrawal of aircraft," the airline said. "The culmination of these actions will result in a severe depletion in the number of aircraft available for Go First to operate going forward, thereby making it further unfeasible for Go First to continue its operation and meet its financial obligations".

The carrier further noted that if Pratt & Whitney were to comply with the orders in the SIAC arbitrator’s award, "Go First would be able to return to full operations by August/September 2023".

Go First has become the second carrier in the last four years to be grounded in India. In 2019, Jet Airways had to shut down operations after it was financially drained out.