Saturday, May 13, 2023

Pratt & Whitney Says It Faces Higher Risks Following Go First Filing

The US-based aircraft engine manufacturer Pratt & Whitney has opposed Go First's request to enforce an arbitration ruling in an engine dispute. Pratt & Whitney made the argument in a Delaware court, citing the risks associated with the Indian airline's recent bankruptcy filing, according to a Reuters report.

Indian low-cost carrier Go First filed for bankruptcy, citing faulty Pratt & Whitney engines as the reason behind the grounding of almost half its fleet of Airbus A320neo aircraft. According to the airline, over 50% of its fleet has been grounded since December 2022, leading to an estimated loss of revenue of $1.32 billion.

However, the engine problem first surfaced in 2017, a year after the airline received its first GTF-powered A320neo jet. Notably, Go First was not the only customer with engine issues. India's budget airline IndiGo also reported having the same problems.

Go First and Pratt & Whitney had previously agreed that the engine manufacturer would compensate the airline for engine support. This agreement was in effect until 2019 and provided the airline with unspecified compensation for any days when its planes were grounded due to engine-related maintenance or replacements.

However, in 2020, the airline reported experiencing more significant engine failures, which led to financial disputes between Go First and Pratt & Whitney in 2022 regarding engine replacement and maintenance.

Pratt & Whitney suggested a plan in February 2023 to offer replacement engines at a rate four times lower than the failure rate, which led to Go First's emergency arbitration filing in Singapore the following month. As a result of the arbitration, the arbitrator ordered Pratt & Whitney to help Go First by providing serviceable spare engines to the airline.

Following Go First's bankruptcy announcement, International Aero Engines (IAE), a shareholder of Pratt & Whitney, made a statement in a filing that was seen by Reuters, saying:

"Go First's recent bankruptcy filing has radically changed the field of play in terms of Go First's need for relief and IAE's risk. The risks for IAE, which were high to begin with, have increased significantly since Go First's bankruptcy."

Pratt & Whitney has refuted Go First's claim that the engine maker is accountable for the Indian airline's financial problems. Pratt & Whitney maintained that it had to suspend services because the carrier could not pay for maintenance and lease charges over the years.

12/05/2023 Vyte Klisauskaite/Simple Flying

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