Go First and engine manufacturer Pratt and Whitney are negotiating a fresh lease agreement that will help the airline scale up operations. P&W has extended a renewed lease agreement with renegotiated terms and prices for each engine, said sources.

This development comes following an interim order from the Singapore International Arbitration Centre (SIAC), which directed P&W to supply five engines monthly to Go First.

Sources familiar with the matter revealed that both parties, in light of the SIAC order, opted to pursue an amicable resolution. Consequently, P&W proposed a new engine lease agreement, effectively rendering the previous one lapsed. The proposed agreement is currently under evaluation by Go First. One of the two people quoted above said, “Since the previous agreement would essentially be lapsed, a new agreement has been given with new lease terms and prices.”

Also read: Your salaries will be disbursed soon, Go First tells pilots

Go First’s financial troubles are no secret, as the airline filed for voluntary insolvency on May 2. It admitted to defaulting on payments to the US-based engine manufacturer.

Supply chain challenges

A source said that P&W has agreed to supply the initial five engines as mandated by the Tribunal “for as many months as it can”. However, P&W faces supply chain challenges that may impact its ability to fulfil the agreement in its entirety. The March order was revised by SIAC to supply five engines as per availability.

Recently, the Directorate General of Civil Aviation granted Go First permission to resume operations with 15 aircraft, down from the original plan of 26 aircraft. The reduction in scale was necessitated by shortages in staff and engine spares.

Both P&W and Go First did not respond.

The Tribunal’s latest ruling requires P&W to make all necessary efforts to dispatch five engines per month to Go First starting from August 1 until December 31, 2023, subject to further orders.

Additionally, Go First has been instructed to obtain cost estimates from the resolution professional within seven days of the current order.

The Tribunal further mandates both parties to provide quarterly updates on the progress of the resolution proceedings, compliance with the order, and any other relevant developments, with the first update scheduled for October 1, 2023.

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