India’s ultra-low-cost carrier GoFirst has refuted rumours that it was planning to exit the aviation business amid a cash crunch.
The company has been battling several operational issues in the recent past owing to a shortage of engines. Speaking to ANI, a top official of GoFirst said, “We have no plans to shed stake or exit the aviation business. Our promoters are committed to the business and are infusing further funds in the form of equity.”
The GoFirst official informed further that the carrier was very confident of receiving Rs 600 crore in the form of promoter equity and bank loan by the end of April.
The official said, “This would help us meet our immediate capital requirements. The Wadia family and the bank will provide Rs 300 crore each.”
“Promoters have consistently supported the airline from inception and provided liquidity from time to time,” the official added.
“Covid, as well as the unrest in Russia and Ukraine, affected the supply chain of the aircraft’s engine to the company,” the official said further.
The aviation industry has been growing at pre-Covid levels but airline companies are facing cash flow and liquidity issues, impeding the smooth running of their daily business.
Currently, GoFirst is running daily operations with 28 aircraft out of the airline’s fleet of 57, with the remaining aircraft grounded due to trouble with engines supplied by American manufacturer Pratt and Whitney.
Speaking to ANI earlier in February, an official from US-based jet engine manufacturer Pratt and Whitney said, “We are experiencing global supply chain challenges, which are limiting the availability of structural castings and other parts. We’re progressing on our mitigation strategies with our supply base and expanding MRO network capacity while continuing hardware and software upgrades to extend engine time on the wing. At the same time, we’re coordinating closely with customers on solutions to minimize operational disruption. We expect supply chain pressures to ease later this year, which will support the output of both production and MRO engines.”