Did America’s Pratt And Whitney engineer GoAir’s free fall?

Domestic air carrier GoFirst is dealing with a lack of adequate number of engines to operate its airline. The third largest airline in the country, requires 103 engines and currently has half the numbers to cater to its operations. 

The overarching story is one that may just be rooted in an American company bound by contract holding an Indian air carrier at siege. And with the Go Air-Pratt & Whitney developments flying thick and fast, Republic World takes a 360 degree view of the basic questions

Why did GoFirst order from Pratt & Whitney?

Pratt & Whitney, an American aircraft engine maker has been blamed squarely by GoFirst for the state of affairs today. In 2011, Go First signed up for the 72 Aircraft NEO deal with Airbus, and chose Pratt and Whitney powered engines. 

However, not only were there delivery delays due to delay in manufacture of engines by Pratt & Whitney but also, over time, the engines developed technical snags, thereby  disrupting the service of GoFirst.

How many engines does GoFirst require?

According to the company, GoFirst requires 103 engines while it only has around 56 at its disposal. This means Go First has half of what it requires for smooth functioning. Go First has positioned itself as an ultra-low cost airline and its price justification is entirely dependent on its fuel-efficient engines. The non-supply of the engines would thus automatically lead to a shut down owing to the lack of viable alternatives.

What is the damage caused by the contract breach? 

The direct result of faulty engines provided by Pratt & Whitney was the grounding of GoFirst’s fleet. While just 7% of the fleet was grounded in December 2019, come December 2022, this tally had risen to 50%.  

In fact, the Singapore emergency arbitration has mentioned that the financial losses faced by GoFirst have been mostly because of the contractual failure of Pratt & Whitney. It has, in its award in favour of GoFirst, asked Pratt & Whitney on an emergency basis to supply at least 10 usable engines by April 27 and more in December this year. The emergency requirement has not been met, forcing the airline to take a drastic measure and declare a cutback of operations.

What has GoFirst demanded? 

GoFirst has demanded Rs 8,000 crore as compensation from Pratt & Whitney. It has stated that progressively the dysfunction on the part of Pratt & Whitney has caused a slow down of operations. 

What next for GoFirst?

Surprised spectators of the developments have responded to the crisis with hope that this may not indeed be the end of GoFirst. In a media report, Mark Martin, CEO at an aviation consultancy, has been quoted to have said, “I am a little stunned to hear of them file for bankruptcy and proceed for IBC.I still feel that this might not be the end of Go First. This must be a vehicle and a means for somebody new to take over."

Is there a non-disclosure on the part of Pratt & Whitney?

GoFirst is not alone vis-a-vis the impact it’s facing due to the alleged non-cooperation of Pratt & Whitney vis-a-vis engine servicing. There have been a slew of affected airlines that purportedly include: Indigo, China Air Express Airlines, S7 and others. 

What are the big questions that emerge? 

Given the nature of the crisis stemming from alleged inaction on part of an American engine manufacturer, big questions emerge: Why has the company not been meeting deadlines which have been agreed upon? Is there any valid reason for Pratt & Whitney to back out on its deliverables? Why is Pratt & Whitney not complying with the arbitral award and supplemental order? And can Indian aircraft carriers be left in the lurch due to the alleged lackadaisical approach of an American company that is a subsidiary of the global defence conglomerate Raytheon Technologies?

What has the Civil Aviation Minister stated on the matter?

In a statement, Union Civil Aviation minister, Jyotiraditya Scindia has said, “Go First has been faced with critical supply chain issues with regard to their engines. The GOI has been assisting the airline in every possible manner. The issue has also been taken up with the stakeholders involved. Yet, it is unfortunate that this operational bottleneck has dealt a blow to the airline’s financial position. It has come to our knowledge that the airline has applied to the NCLT. It is prudent to wait for the judicial process to run its course. Meanwhile, the DGCA has issued a notice to the airline on the sudden suspension of flights. It’s incumbent upon the airline to make alternative travel arrangements for passengers, so that inconvenience is minimal.”

The Minister had previously responded to a question at Republic Summit 2023 stating, “ Pratt and Whitney is going through many supply chain issues and we have impressed upon them that our sector cannot be stymied.”