What is insolvency?
Insolvency occurs when an organisation has more debt than income. Due to this, they are unable to repay money borrowed from others.
For example, you borrow 500 rupees from your friends to buy a toy. You bought the toy, and now you don’t have enough money to repay them. That means you're insolvent and owe more money than you have. Now, you sell some of your old toys for 300 rupees and give the money to your friends. But you still owe them 200 rupees.
You can request that they forgive the loan. This means they won't expect you to pay it back. You can also wait till you have enough money to repay them.
It is very important to use one's money properly and only borrow what one can repay. This will help avoid insolvency. Recently, an Indian airline company, GoFirst, has declared insolvency.
What has happened to GoFirst Airlines?
GoFirst was forced to declare insolvency due to a financial shortage. The airline has blamed this situation on Pratt & Whitney (P&W), a company that supplies them with engines. Only half of GoFirst’s planes are working, as P&W has not provided extra engines.
Due to engine problems, many flights had to be cancelled. The company couldn't earn enough money while their planes were grounded. So, they have filed for insolvency. The company has cancelled all flights from 3rd May to 5th May 2023.
Thousands of travellers who had purchased tickets have been affected. Anyone who purchased flight tickets for these dates has received a full refund.
What’s next for GoFirst Airlines?
GoFirst is working hard to fix the present situation as quickly as possible. The Indian government is also trying to help them. GoFirst has also taken legal action against P&W to get the engines delivered at the earliest. This will allow the airline to resume flights as soon as possible.
What has Pratt & Whitney said about GoFirst?
P&W stated that it is trying to provide essential parts to all of its customers on time. It also said that GoFirst has a history of delaying or failing to pay for items given to them.
Let’s hope both companies can solve this issue so that the passengers and employees of GoFirst don’t have to face any further difficulties.
