Sources said on Thursday that Indian airline GoFirst is considering legal action against Pratt & Whitney (PW) for failing to provide compensation after March 2020.
About 90 percent of the airline’s aircraft fleet uses PW engines. Around 24 of the airline’s 55 aircraft have been grounded due to delay in supply of engines by PW. GoFirst is operating 27 percent fewer flights in March 2023 than in March 2022 (see table).
PW’s contract with GoFirst has three main conditions: PW must provide a spare engine within 48 hours of an aircraft being grounded due to a failed engine; Defective engines to be repaired free of charge as they are under warranty; and compensation to be provided to the airline for “productivity loss” due to the grounded aircraft.
“As of March 2020, PW has provided spare engines on time, repaired without cost, and provided some compensation. However, after that the airline has not received anything.
PW and GoFirst did not respond to queries for this trade standard,
Sources said the Wadia Group, the promoters of GoFirst, invested around Rs 3,000 crore in the airline in the last 20 months. During this, he has also incurred a debt of about Rs 1,300 crore. Sources said the group initially thought that the fight with the PW would complicate matters. “The airline is asking the engine manufacturer to honor its contractual obligations. Now, one of the obvious ways is to take the legal route, reminding them of their obligations,” said a source. Sources said the airline may file a lawsuit and is taking legal advice on the matter.
According to data from Cerium, the airline operated 2,084 flights in a week in March last year. However, with more aircraft to be grounded in 2022, flight operations have been reduced, with the airline operating 1,642 flights a week.
IndiGo is the only other Indian airline that uses PW engines on its A320 aircraft. According to Cerium, 34 of its aircraft are grounded due to delay in supply of engines from PW. However, IndiGo’s flight operations have not been affected to the same extent as GoFirst, as it has a large fleet of around 300 aircraft.
On November 4 last year, during an investor conference call, IndiGo CEO Peter Albers said, “One of the major post-pandemic impacts in the aviation industry is supply chain disruption in aircraft manufacturing and shortage of spare engines worldwide . This has affected our operations due to the grounding of aircraft and has affected our ability to fully and productively deploy the capacity.”
GoFirst received its first PW engine-powered A320 aircraft in 2016. “The PW engines started facing problems 6-8 months after the first delivery,” said a source.
The Go First issue comes at a time when other Indian carriers are expanding their flights due to rising demand. According to Cerium data, in March 2022, Indian carriers were operating 19,220 domestic flights a week. As of now, they are operating 21,328 flights in a week.
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