NEPC Airlines, Damania Airways, Jet Airways, Kingfisher Airlines, Deccan Aviation, and Paramount Airways have one thing in common. These airlines and several others took off fast only to crash land or get bought out by others. Well, the annals of the Indian private airline industry are dotted with many airways taking off and crash landing with some continuing to fly. The list of failed airlines in India is quite long – full service or low-cost – and the major reason was financial crunch due to various factors. Many of these airlines were promoted by well-known industrialists/industrial groups.

The latest airline that finds itself in a turbulent financial weather is Go Airline (India) Limited. The reason according to Go Airline is “…due to the ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, which has resulted in Go First (airline brand) having to ground 25 aircraft (equivalent to approximately 50 per cent of its Airbus A320neo aircraft fleet) as of May 1, 2023”.

With nearly 50 per cent of its A320neo fleet grounded, Go Airlines (India) Limited, India’s third largest airline, on Tuesday approached the National Company Law Tribunal (NCLT) for resolution under Section 10 of the Insolvency Bankruptcy Code (IBC).

According to Go Airlines, it has been forced to apply to the NCLT after Pratt & Whitney, the exclusive engine supplier for its Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC).

According to a news report, Go Airlines has filed a case in a US court against Pratt & Whitney. The airline said it has resorted to approaching NCLT despite the infusion of Rs 3,200 crore by the promoters into the airline in the last three years, of which Rs 2,400 crore was injected in the last 24 months, and Rs 290 crore in April 2023 alone.

Thus, the total promoter investment in the airline since its inception is approximately Rs 6,500 crore. The airline has also received significant support from the Government of India`s Emergency Credit Line Guarantee Scheme, the company said.

The grounding of close to 50 per cent of its A320neo fleet due to the serial failure of Pratt & Whitney engines, while it continued to incur 100 per cent of its operational costs, has set the airline by Rs 10,800 crore in lost revenues and additional expenses.

Moreover, the airline has paid Rs 5,657 crore to the lessors in the last two years of which approximately Rs 1,600 crore was paid towards lease rent for non-operational grounded aircraft from the funds infused by the promoters and the Government of India`s Emergency Credit Line Guarantee Scheme.

In order to recover these (and other) losses, Go Airlines sought compensation of approximately Rs 8,000 crore in the SIAC arbitration. Be that as it may, many of these airlines that took off and took over or crash landed were promoted by well known industrialists/industrial groups.

For instance, the Kingfisher Airlines was promoted by Vijay Mallya and the NEPC Airline was floated by the Chennai-based NEPC Group which had raked in huge money from selling wind turbines. The NEPC group also ventured into pharma, textiles and other sectors.

One of the earliest private airlines that ventured into business after the Indian government deregulated the sector was ModiLuft in 1993 by S.K. Modi in technical partnership with Lufthansa, Germany.

ModiLuft was among the first of India’s first post-deregulation airlines, launched in April 1993 by industrialist S.K. Modi in technical partnership with the German flag carrier Lufthansa. The two companies later fell out and the airline got grounded while its Air Operators Certificate was acquired by SpiceJet.

Interestingly, the SpiceJet ownership too changed hands from its original promoter Ajay Singh to media baron Kalanidhi Maran and again to Singh. The other notable airline and low-cost pioneer was Deccan Aviation promoted by G.R. Gopinath. The airline was later merged with Kingfisher Airlines which in turn ran up huge losses, debt and shut shop in 2012.

Similarly, founded in 1993, Jet Airways grew to become one of India’s largest airlines. But price competition from new players resulted in Jet Airways making losses and before finally stopping operations in 2019.