Indian minister says Go First bailout unlikely without engine fix

India is unlikely to bail out Go Airlines (India) Ltd unless a solution is found to supplying it with engines, a minister said.

The low-cost carrier filed for bankruptcy protection last week, blaming "faulty" Pratt & Whitney engines for the grounding of about half its 54 Airbus A320neos.

The airline, widely known as Go First, which has been flying for nearly two decades, is the first major Indian airline to collapse since 2019, when Jet Airways went under.

India's Deputy Aviation Minister VK Singh told news agency ANI that the government has previously held talks with US-based Pratt & Whitney to resolve the issue at the airline, which until recently was India's fourth-largest by passengers flown.

"The problem with Go Air is that their flights are run on engines of Pratt & Whitney which is facing management issues since after COVID-19...So (engine) manufacturing is not happening at the pace that it should," Singh said on Monday.

Pratt & Whitney, part of Raytheon Technologies, did not immediately respond to a request for comment on the minister's remarks outside of business hours. It has previously told an arbitrator that the airline's claim of defective engines causing its demise was "astounding" and without evidence.

"What can be done about a bailout? Where will Pratt & Whitney get (engines)? (A) bailout can only happen when something can be done about this," Singh said in response to a question about the possibility of a government rescue.

The government is moving to protect passengers first with the aviation regulator issuing a notice to Go First late on Monday to stop selling new tickets.

Go First, whose market share has fallen to 7.8 per cent at the end of March, from 8.8 per cent in 2022, has also been asked to make cash refunds to passengers for cancelled flights, a government source told Reuters on Tuesday.

"The government is not thinking about a bail out as of now".

Go First's fate underscores fierce competition in a sector dominated by IndiGo and the announced merger of Air India and Vistara, even though India's growing industry has bounced back from the COVID-19 pandemic and hit record passenger levels.

On Monday Go First called on India's company law tribunal to urgently grant its request for bankruptcy protection, as more lessors sought to repossess planes.