Go First has prepared to recover damages of $ 1.1 billion from Pratt & Whitney.Image Credit source: File Photo
Budget airlines GoFirst has declared itself bankrupt. He has told the reason for this to the bad engines of Pratt & Whitney. Now the company has made preparations to recover damages from Pratt & Whitney. This compensation is about 1.1 billion dollars, about 8990 crore rupees. Now it remains to be seen whether this will change the future of the company?
GoFirst has filed several cases at different jurisdictions to recover damages from Pratt & Whitney. In such a situation, questions are also being raised on the submission of documents for the bankruptcy process of the company, on which the NCLT has also reserved its decision.
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The company will help the court officer in recovery
If GoFirst does not get relief from the interim moratorium on its financial liabilities from the NCLT, a resolution professional will be appointed by the court. After this, the decision related to the company will be taken by the officer appointed by the court.
In such a situation, regarding fighting the case with Pratt & Whitney, the company says that the resolution professional will take the final decision, but then GoFirst will provide all possible help to it. Apart from the US, the company has filed cases against Pratt & Whitney in Germany, Japan, Europe and Singapore.
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How was the calculation of 8990 crores done?
On how the company calculated the $1.1 billion damages, GoFirst CEO Kaushik Khona told in an interview that due to Pratt & Whitney’s faulty engines, the aircraft remained grounded for the equivalent of 20,000 flight days. Due to this, the company lost $ 55,000 every day. The loss of the company itself is equal to about 1.1 billion dollars.
Apart from this, the promoters of the company have invested more than Rs 6,500 crore. In such a situation, if Pratt & Whitney is asked to accept all the terms of the contract, then the promoters will get more than 100 percent return.
Will the company’s days improve with the amount of compensation?
Can the days of the company improve in future with such an increased amount in damages? If so, why did the company proceed with the bankruptcy process? In this regard, the company says that it currently has 54 aircraft registers. Out of this, 27 are in operation. The decision to go to NCLT was taken so that the leasing company does not take them back and let them remain with the company until the engines arrive.
The company has approached the bankruptcy court neither to cut the loan nor to close it. Everything was going normal till May 2. If Pratt & Whitney supplies the engine on time, then by August and September the company will start running with the entire fleet. The promoters of the company are also determined to save the company. In the last 10 days of April, he raised Rs 290 crore from equity.