CRISIS IN THE SKIES

THE TROUBLES AT GO FIRST BRING TO THE FORE THE VULNERABILITY OF THE INDIAN AVIATION INDUSTRY IN THE FACE OF INTENSE COMPETITION AND HIGH OPERATING COSTS. EXPERTS FEAR MORE CASUALTIES IN THE SECTOR

- M.G. Arun

The May 2 decision of Go First, India’s third-largest carrier, to suspend flights for two days—later extended till May 19—caught fliers, the aviation regulator and the Centre totally off guard. So did its move to file for voluntary insolvency proceedings before the Mumbai bench of the National Company Law Tribunal (NCLT). The company has cited the long delays in sourcing airworthy engines from the US aerospace major Pratt & Whitney as the reason behind the decision to go for insolvency, but experts say the real issues go far beyond engine troubles, and point to financial problems at the airline and systemic issues in Indian aviation that will see most airlines flying through a turbulent phase in the days ahead. Indian airlines have reported consolidated losses of close to $17 billion (Rs 1.4 lakh crore) since FY2010, says CAPA Advisory, an aviation consulting firm. On May 10, the NCLT admitted Go First’s plea, offering it protection against any immediate attachment of its assets by the company’s lessors and lenders.