EVEN as the aviation sector in India was coming out of the turbulence caused by the coronavirus pandemic-induced lockdown, the fresh crisis in Go First airlines has put another hurdle in a smooth take-off. The airliner has suspended its flights till May 15 amid severe funds crunch and has moved a plea for voluntary insolvency resolution proceedings. While the National Company Law Tribunal (NCLT) will deal with the application, the entire episode points towards an imbalance in financial management of low-cost airliners. Go First has been an integral player in the Indian aviation industry dominated by Indigo and Air India, the two big players. It had some significant routes offering budget travel to a large section of flyers. The airline’s raising of white flag has now raised a spectre of massive job loss and a possibility of a two-way race in the Indian skies. It is something that does not augur well for a growing economy.

Go First’s filing for insolvency has come at a real bad time. It is the summer holiday season and flight carriers are entering into a high-demand phase. The sudden stop on operation by Go First has upset the entire balance with the consumers staring at burning a hole in their pockets even for a one-hour journey. The crisis has also put the jobs of around 8000 people, including pilots, and other crew members, on line. In hard numbers, it would affect the entire sector pretty hard. In case the NCLT order goes against the Go First plea, then the airliner’s 56-aircraft fleet will be rendered useless thus dwindling the already less aircraft register in the country. Halt in operations would also mean a revenue loss for the Government of India through Goods and Services Tax (GST), Value Added Tax (VAT) and excise. Further, it would press the panic button for other affordable airliners. The crisis is another wake-up call for the Government, after the Jet Airways debacle, and all the stakeholders now need to deliberate deeply to stop its cascading effect on every walk of the economy.

The Indian aviation sector has always been a tricky ride for airliners, especially no-frills airline operators. The recent past has seen many players jumping the bandwagon with full throttle only to fizzle out after a pretty short flight. The automatic culling has left the skies open for only two big names. While Indigo is a clear winner in the race, so far, the handing over of Air India to the Tata Group has opened up a new possibility in the sector. The two rivals have jumped on the opportunity by swiftly ramping up capacity to capitalise on the reduction of flights. Air India and Vistara have fastened recruitment processes to pick up best available talent in the market after the suspension of flights by the Wadia group airlines. India certainly cannot afford such a small size of its aviation sector if it wishes to attract investments and tourism. Also, it would be another spanner in the Centre’s UDAN scheme aiming to connect smaller cities.

The trouble with Go First has also brought up a critical point to ponder by the entire industry. The airline had been blaming American manufacturers Pratt & Whitney (PW) for its delay in providing engines. Almost every airline has reported flaws in the PW engines. Indigo has managed the engine problem due to its large fleet size but for Go First it was getting impossible to fly its limited fleet due to faulty engines. The PW must get its act together and withdraw its faulty products. Continuation of the flawed engines can easily lead to a major mishap. Airlines cannot take such a huge risk and also cannot keep its fleet grounded for a long time. Go First crisis has indicated that commercial operations cannot be sustained with perpetually failing engines. There are too many angles to probe for the Government.