Will SpiceJet and other bids for GoFirst help the airline's revival?

GoFirst Insolvency case: Having scaled Indian skies for over two decades, and constantly connecting the country to more and more overseas destinations, GoFirst was once, arguably the most-preferred low-cost airline. Soon after a certain malfunction in the Pratt and Whitney brand of engines of its Airbus Neo fleet, which lead to the partial grounding of its fleet, GoFirst faced its first roadblock. Mass flight cancellations, caused the airline go in the red. Will the recent bids for GoFirst, pave the way for its speedy insolvency? Republic Business takes a deep dive 

Hope for revival 

Soon after GoFirst began cancelling its flights in 2021, one after the other, trouble brewed for the airline. Within just two months after it reported the grounding of its first few flights and a subsequent 50 per cent fleet rendered dysfunctional, over 3,500 members of GoFirst’s  cabin crew and ground staff were left unemployed. 

However, aviation analysts are hopeful for an end to GoFirst’s gloom and doom. “It is quite unfortunate that GoFirst and before that Kingfisher and Jet Airways all went bankrupt,” said Goyal, adding that this has put a lot of passengers in hardship. 

NCLT proceedings 

With two bids submitted to the committee of creditors as per the insolvency process, the National Company Law Tribunal (NCLT), provided an extension of sixty days for GoFirst to solve its insolvency issues. 

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The Resolution Professional (RP), who ensures the revival of the corporate debtor, had informed NCLT of the interest shown by three bidders - SpiceJet led by its CMD Ajay Singh along with Busy Bee Airways, an entity of Ease My Trip with 51 per cent holdings of the travel portals founder Nishant Pitti. 

Besides, Sharjah-based SkyOne, with a presence in aviation and charter services, is the second bidder for SpiceJet. Former IATO President and industry heavyweight, Dr Subhash Goyal believes creditors involved in the insolvency process must be given sufficient time.  

“In the US, there is Chapter 11, where airlines get an opportunity to re-establish themselves and the creditors have to be given time so that the airline can bounce back. I think something similar has to start and I believe that the government should also start travel insurance, so that people, you know, who are stuck at the last minute, you know, they don't lose their money and they are able to carry on their journeys. 

GoFirst is a plump catch 

Factors pivotal to GoFirst still holding ground include the key air traffic slots allocated to it by the airline regulator.  Besides, a strong presence in the international aviation arena, makes GoFirst a good catch. 

Being the forerunner to bag an order for over 100 Airbus Neo Planes, and possibly, a compensation amount from engine maker Pratt and Whitney are temptations any bidder cannot ignore. 

In possession of huge land parcels, GoFirst can potentially mop up a whopping Rs 10,000 crore, with its land assets. As regulators pave the way for the two bids for GoFirst to reach the National Company Law Tribunal for its purview, India’s aviation sector is waiting and watching the space.