Go First Passengers Will Need To Wait For Refund: Rs 200 Crore Can Be Raised To Pay Salaries, Refund Money


Rohit Kulkarni

Rohit Kulkarni

May 12, 2023


Several sources familiar with the matter have revealed to Moneycontrol that individuals who had reserved seats on Go First flights, which were subsequently cancelled, may have to endure a protracted delay in receiving their refunds. The airline is expected to appeal for additional time from the National Company Law Tribunal (NCLT) and Directorate General of Civil Aviation (DGCA) to obtain the necessary funds. 

Go First Passengers Will Need To Wait For Refund: Rs 200 Crore Can Be Raised To Pay Salaries, Refund Money

Go First to Raise Funds For Refunds of Tickets

According to one source associated with the airline, “Go First is likely to request a moratorium from the NCLT to raise funds for issuing refunds for tickets cancelled after May 2nd.”

He mentioned that although giving refunds to customers is the most important task for Go First, it may take a few weeks to complete the process. A second insider with knowledge of the matter stated that Go First and its backers are expected to generate approximately Rs 200 crore in the near future to cover refunds and employee salaries. 

A third individual familiar with the situation stated that the airline is optimistic that some customers may agree to receive complimentary tickets as compensation once operations resume.

The person said that “Paying the salaries of its employees and providing refunds to passengers is of utmost importance to Go First and its promoters. However, the airline is hoping that some passengers believe in the airline and opt for future tickets instead of direct refunds”.

He said that if the NCLT quickly considers Go First’s request and if the Delaware federal court confirms the decision of the Singapore International Arbitration Commission (SIAC) in its dispute with Pratt and Whitney, the airline will be able to resume its operations soon and offer customers other flight options. 

On March 30, the SIAC had ordered Pratt & Whitney to provide Go First with at least 10 functional engines by April 27, 2023, and the remaining engines by the end of the year. Pratt & Whitney refused to comply, and on April 15, the SIAC issued a second arbitration award instructing the US-based company to comply with its order.

The Singapore International Arbitration Commission (SIAC) issued a second arbitral award on April 15 ordering Pratt & Whitney to comply with its initial order of providing Go First with at least 10 serviceable engines by April 27, 2023, and the remainder by the year-end. However, Pratt & Whitney has still not adhered to the order and has only committed to providing three serviceable engines by the end of May. Go First had to cancel flights as it was unable to operate more than half of its Airbus 320neo planes due to the unavailability of spares and engines from Pratt and Whitney. This has led to the airline’s refund dues to passengers reaching around Rs 450-500 crore as they have had to cancel flights until May 15. Moreover, the DGCA has ordered the airline to stop accepting bookings.

TAFI Recommendations to Go First

The Travel Agents Federation of India (TAFI) recently requested that Go First deposit the ticket refund amount directly into agents’ bank accounts as many customers are requesting refunds. TAFI suggested that the airline could use the agents’ funds deposited in a credit shell account with the airline for this purpose. A credit shell account is a credit note created for a cancelled PNR to be used for a future booking by the same passenger/s.


Rohit Kulkarni
Rohit Kulkarni
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