Go First, a budget airline in India has filed for bankruptcy protection, citing engine issues as the cause. This has resulted in the cancellation of its flights for several days, leaving customers disgruntled and the company dealing with a high volume of calls for refunds. The airline has blamed Pratt & Whitney, a US engine maker, for grounding many of its planes, which has caused a severe cash flow problem.

Pratt & Whitney has responded by stating that it is complying with the March 2023 arbitration ruling, and this is now a matter of litigation. Around 90% of Go First’s fleet is made up of A320neos with Pratt & Whitney engines, making the engine maker a significant player in the current crisis. Go First claims that it was a consistently profitable airline with a gradual expansion strategy until 2020 when it was hit by the problem of serial engine failures. The pandemic further exacerbated the company’s financial performance.

The insolvency proceedings are aimed at reviving the airline and not selling it, and the management has stated that the airline’s owners, the Wadia Group, have no plans to exit. However, some of Go First’s leased planes have been repossessed due to non-payment of rental dues, and oil marketing companies had sought an immediate payment model, which was difficult for the airline to meet as its revenues shrank.

While Go First’s crisis may help competitors such as IndiGo, Air India, SpiceJet, and new entrants like Akasa Air to grab a larger chunk of the market share, fares on Go First’s routes are expected to increase sharply by as much as 50–60% in the next three to four months. If Go First shuts down, more than 50 aircraft will be grounded, which will further strain the capacity of existing airlines.

Nonetheless, the overall growth story of the Indian aviation market is still intact and will mostly be driven by two or three players, according to experts. In November, Air India and Vistara announced their plans to merge, and in February, Air India set a global record by ordering 470 aircraft from Airbus and Boeing. This indicates that the Indian aviation market is still growing, and there is potential for other airlines to thrive despite the current crisis faced by Go First.

Go First’s bankruptcy filing and cancellation of flights have caused significant inconvenience to its customers, but it is hoped that the insolvency proceedings will revive the airline rather than sell it. The crisis faced by Go First may provide opportunities for other airlines to gain market share, but if the airline shuts down, it will further strain the capacity of existing airlines. The overall growth story of the Indian aviation market remains intact, with potential for two or three dominant players.