Go First Airlines, India’s ultra-low-cost carrier, on Tuesday, dismissed reports that it was planning to exit the aviation business due to a cash crunch. The company has been facing operational issues lately due to a shortage of engines.
In a statement to ANI, a senior official from Go First Airlines stated that the airline had no plans to sell its stake or leave the aviation industry. The official further said that the airline’s promoters were committed to the business and were infusing additional funds in the form of equity.
Go First is confident of receiving ₹600 crores in equity and bank loan
According to the official, the carrier was confident of receiving ₹600 crores in the form of promoter equity and bank loans by the end of April. The infusion of funds would help the airline meet its immediate capital requirements. The Wadia family and the bank would each provide ₹300 crores.
The official added that the promoters had consistently supported the airline from the beginning and provided liquidity when needed. However, the Covid pandemic and the unrest in Russia and Ukraine had impacted the supply chain of the aircraft’s engine to the company.
Cash flow and liquidity issues affecting the airline industry
The aviation industry has been growing at pre-Covid levels, but airline companies are facing cash flow and liquidity issues that impede their daily business operations. Currently, GoFirst is operating 28 aircraft out of its fleet of 57, with the remaining aircraft grounded due to engine troubles caused by American manufacturer Pratt & Whitney’s supply chain issues.
Challenges faced by Pratt & Whitney
In February, a Pratt & Whitney official based in the United States stated that the company was experiencing global supply chain challenges that were limiting the availability of structural castings and other parts.
The company was working on its mitigation strategies with its supply base and expanding its MRO network capacity while continuing hardware and software upgrades to extend engine time on the wing. The official also mentioned that they were coordinating closely with customers on solutions to minimize operational disruption.
The company expects the supply chain pressures to ease later this year, which would support the output of both production and MRO engines.
In conclusion, Go First Airlines has denied rumours of an exit from the aviation industry and is confident of receiving funds to meet its immediate capital requirements. However, the supply chain challenges faced by Pratt & Whitney continue to cause trouble for the airline’s daily operations.
(Source and Inputs from ANI)
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