JOIN USAviation sector has an engine trouble. Go First crisis is a precursor
Spiritualist Sri Chinmoy once said, “Do not blame the world. Find a solution.”
In aviation, the first step to finding a solution is admitting to the problem, and Pratt & Whitney (PW) needs to get its act together with taking responsibility for the flaws in the PW1000G, 1100G, and 1524G Geared Turbo Fan (PW-GTF), repeal or withdraw the product from the market; or replace it with an improved option, or even better, a whole new clean sheet design engine.
In the event of this not taking place, what could happen is that 8,000 jobs get axed, 56 aircraft leave India’s already badgered and dwindling aircraft register, the Government of India making less from GST, VAT, and excise revenue, airports lose out on revenue share, oil companies see lesser jet fuel sales, and five million passengers get stranded each day should Go First go under.
Air Tanzania, Air Senegal, Turkish Airlines, IndiGo, Air Asia, Air India, Batik Air, Spirit Airlines, All Nippon Airlines, Hong Kong Express Airlines, Lufthansa, Jet Blue, Swiss Air, and Air Baltic all join Go First with reporting severe design flaws and poor metal quality with the PW-GTF engine, and we’ve reached a spot today that Airbus itself has made it clear that it would not be accepting anymore PW-GTF engines till PW comes up with a permanent solution.
Flawed design
The problems with the PW-GTF engines are real, catastrophic, compromise safety; and near to fatal triggering full-blown emergency landings, teeth-rattling vibration, corrosion, separation of fan blades during flight and premature removal of an engine for maintenance at one-fourth of PW’s own defined removal time; in addition to metal shavings showing up in the engine oil, cracked metal casings and fractured metal alloys. The US’ Federal Aviation Administration and Europe’s European Aviation Safety Agency, in order to avert a major mishap, approved the use of mixed engines (something never done ever before in commercial aviation) while banning ETOPS flights (flights over water that are more than 180 mins). India’s Directorate General of Civil Aviation (DGCA) in 2019 went a step ahead by grounding 11 aircraft operating with PW-GTF engines.
One of its strangest anomalies noted with the PW-GTF is a loud, shrill, sharp howling noise that shows up either when the aircraft is taxing to the runway to take off, or noted during landing. What resembles a reported ‘whale-song’-like sound morphs itself into a ear-drum-shattering noise measuring a staggering 12dB just short of landing.
For airlines in India, it has been rough. IndiGo reported nearly five in-flight engine failures during the most critical flight phase (climb), while Go First reported several compressor stalls collocated with very high vibration, corrosion, and engine damage.
Overdependence on PW-GTF
Unlike IndiGo that hit critical mass with its fleet around 2013 with the stable CFM-installed Airbus A320, GoAir (which was later rebranded Go First) played its safe around a time when airlines were pulling out from the 2008 financial crisis; and when Kingfisher Airlines folded up, Paramount Airways and several other regional airlines shut shop. It made sense to weather the storm and grow when the moment was right.
Go First in 2014-15 announced its biggest order for Airbus A320 New Engine Option, a total 50 aircraft with options for another 50 to be inducted till 2020. This meant that Go First’s future revenue generation would reside entirely on the PW-GTF engine — an unproven, ‘new’ technology platform prematurely tested and forced into the market to capture airline attention with performance stats that were ‘promised’. Sure enough, the problems with the PW-GTF started to show up by late 2016 and early 2017, and they were serial, catastrophic failures beyond the control of Go First, and IndiGo, Air Asia, Lufthansa, Turkish, Swiss Air, and Air India as well.
Discontinue immediately
It’s time we defined this issue correctly. The current problem Go First is facing due to the PW-GTF is not a ‘supply chain’ one. Supply chain issues occur when a product is reliable, robust, functional, and in high demand. PW-GTF issues plague a Lufthansa, IndiGo, Swiss Air, and Air Baltic as much as it does a Go First — and it’s high time Pratt & Whitney discontinued the PW-GTF series engine, and airlines switch to another engine option.
To be fair, Pratt & Whitney in the past has designed and made some of the finest and most reliable engines, such as the PT6A Series, PT6T, and PW4084 series that continue to operate and fly to this day without a hitch, glitch, or anomaly. In the past, I too sworn on the PW engine’s dependability and reliability. Not anymore. Witnessing PW’s current attitude to the PW-GTF issue not just destroys PW’s own credibility with its loyal customer base, it also indicates the engine maker’s not-so-kosher effort to shirk off responsibility.
While PW has said that its updated GTF Advantage version of the A320neo's PW1100G should address all the previously reported problems with its engine, it would take airlines a long time to rebuild that trust with PW engine.
Hanging by a thread
Never has an airline succumbed to its fate because of a flawed engine or component. Go First’s filing of voluntary bankruptcy proceedings is directly attributable to engine and component failure with the PW-GTF, and this isn’t self-inflicted because of the Wadia’s management styles.
From Go First’s modest start, the airline was probably the smartest by not opting to grow its fleet blind when others chose to raise extremely high exposures for themselves. Its strategy worked, and the airline grew to a healthy 9 per cent market share, an extremely robust and stable network, well-timed flight schedules, and a good in-flight product. Go First did make money too, thanks to corporate bulk packages, its flight schedule and on time performance — despite all the maintenance and engineering madness with the PW-GTF engine. The Go First playbook worked well, and the decks were cleared for an IPO planned for 2020.
Go First’s Draft Red Herring Prospectus (DRHP) filed before SEBI disclosed in explicit detail the issues and challenges with the PW-GTF engine and how the airline was exercising all its possible options to get its rightful restitution from Pratt & Whitney. Around the cusp of 2021, Go First took Pratt & Whitney to arbitration in an expensive legal battle in Singapore that resulted in the arbitrator awarding an order in Go First’s favor — Pratt & Whitney was ordered to deliver a minimum of ten engines by 2022. Of the 10, only three were delivered with Pratt & Whitney brazenly defaulting on the Singapore arbitration order.
Not gone yet
Go First filing for voluntary bankruptcy proceedings on itself indicates that the airline has breached all thresholds of sustaining reasonable commercial revenue service because of a perpetually failing engine grounding 90 percent of its entire fleet. The IBC proceedings is possibly the smartest step given the airline’s predicament as more than shutting shop or folding up, it is now the courts responsibility for establishing the total liabilities and debt from operational creditors and in turn come to a logical, fair and mature settlement, even if means to have someone buy out Go First from the IBC courts as long as the product or the brand continues to live on.
We have a good optimistic precedent with this: after the September 11, 2001 terror attacks, the liability for United Airlines overshot all logical cash interventions by its management; and United Airlines filed for Chapter 11 bankruptcy protection. United Airlines’ debt and payables were restructured, lenders opted for structured settlement, new investors came into United Airlines and the airline overhauled its entire product line, with the coming up of the low-cost airline ‘TED’.
Go First’s move with IBC gives hope and indicates that the root cause of the problem is expenditure because of an erratic income source due to fleet groundings. The difference between a Jet Airways in insolvency and a Go First is that Go Air’s step is voluntary and self-initiated, and not an action by banks and lenders, and this goes to show that the Wadia’s are making all concerted and relentless efforts to pull the airline out of the quagmire.
GoAir’s IBC filing comes in at a bad time, when India enters its extremely high-demand summer holiday season. Although I hope that Go First continues to operate and fly during the course of its insolvency proceedings, should the airline cease to operate or function beyond May 5, India is expected to notice an exponential rise in the cost of travel with the Indian Railways starting to come up as the best, second option, and that’s because Indian carriers don’t have at their disposal 200 spare aircraft that can be deployed overnight.
The next three months are crucial for Go First. This is sure a nail-biter.
(Mark D Martin is CEO of Martin Consulting, and is member of the Royal Aeronautical Society United Kingdom.)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.