Go First's legal battle with P&W likely to be messy, drawn-out affair: Execs

Pratt & Whitney air-cooled radial engine of U.S. aviator Amelia Earhardt's Lockheed 5B Vega aircraft is seen at Air and Space Museum in Washington

Go First, which suspended operations and filed for voluntary insolvency, may find it difficult to resume flights in India any time soon because the airline's legal battle with Pratt & Whitney over faulty engines is likely to be a messy, long drawn-out affair, senior aviation executives said.

“Pratt & Whitney is not likely to just give in to the demand of Go First and provide both compensation for the grounded fleet and also supply it with new engines or spare parts," said a senior executive of an international carrier operating in India.

He added that even if Go First wins its legal battle against P&W, the engine maker is likely to contest the case in the higher courts, which could delay the resumption of Go First’s operations by up to a year.

Go First filed for insolvency on May 2, citing the grounding of half of its fleet due to faulty engines supplied by P&W. Earlier, on April 28, the airline moved an emergency petition before the Delaware Federal Court on April 28, calling for a legal order to force P&W to comply with two arbitral awards issued by the Singapore International Arbitration Centre (SIAC).

Appeal likely

The SIAC ordered P&W on March 30 to provide Go First with at least 10 serviceable engines by April 27 and the remainder by the year-end. After P&W refused to comply, the SIAC issued a second arbitral award on April 15, asking the US company to fulfil its order.

Another senior executive of an international carrier said P&W is unlikely to accept any arbitration order that harms its reputation.

"Even if the Delaware court rules in favour of Go First, P&W will likely pursue the case in a higher court and may even look at an out-of-court settlement," the second executive said. Going by the history of legal disputes between aircraft equipment makers and airlines, disputes may take at least a year to get resolved.

However, even if the legal dispute between Go First and P&W is resolved, the US company still faces global supply chain issues, which will limit the supply of engines to Go First for six months.

“Lessors of Go First are already looking to take possession of their aircraft and if the legal dispute is prolonged for another month, Go First will be forced to part with its planes," a senior aviation official said, adding that with a limited fleet, the airline will unlikely be able to operate profitably in the short term.

He added that the Indian carrier is also likely to struggle with its airport slots, passenger confidence, and employees in the short to medium term.
According to the first executive, following the outbreak of the COVID-19 pandemic, collaboration with equipment makers was key for the survival of any airline globally.

“Go First's aggressive stance on the faulty P&W engines is likely to hit the airline more than P&W," the first executive said.

He added that many airlines around the world were struggling with engine issues due to P&W and instead of blaming the engine manufacturer they were collaborating with the company to come up with solutions.

Go First chief executive Kaushik Khona said last week that it had sued P&W for damages in the US and was hoping to receive as much as $1.1 billion in compensation from the company.

“To ensure this happens, we will tap into many more jurisdictions across the world, some of which are in the US, one in Germany, one in Japan and maybe one or two more in Europe and Singapore," Khona said.

Order backlog

Carriers around the world are dealing with a shortage of engines and spare parts, particularly on their latest-generation workhorse narrowbody jets. Suppliers to P&W, a subsidiary of Raytheon Technologies Corporation, have struggled with a backlog of subcomponent orders.

Lufthansa, IndiGo, Spirit Airlines and Go First have all been hit by issues due to faulty P&W engines. Last week, Lufthansa said it had grounded a third of its Airbus SE A220 fleet in Zurich owing to problems with P&W engines.

Earlier this month, Airbus CEO Guillaume Faury said P&W has been struggling to support its fleet of passenger jets with spare parts and engines.

"This being said, there are issues with in-service support of the GTF that are leading to airlines having planes with temporary issues, and planes 'AOG' (grounded), and this is something that we are very closely monitoring," Faury said on May 3.

Go First and P&W reached a deadlock in March when it came to negotiations about the PW-1100G GTF engines, with the airline looking to sue the engine maker over its grounded aircraft.

In 2019, Go First signed a deal to buy P&W engines for its 72 A320neo aircraft along with a comprehensive service agreement that mandated compensation from the engine maker for maintenance issues.

However, Go First claims that P&W stopped supplying spare engines to the airline and asked Go First to pay for the repair of faulty engines, despite being under contract to repair them free of cost.

P&W responded to allegations by Go First Airline, saying that it was committed to meeting delivery schedules. It also highlighted Go First's history of not meeting financial obligations.

P&W said in a statement it is committed to the success of its airline customers, and continues to prioritise delivery schedules for all customers.

P&W is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, it will not comment further.

Go First filed for voluntary insolvency resolution proceedings in the National Company Law Tribunal on May 2.