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Tuesday, May 30, 2023

Go First’s Owner Has No Intention of Leaving the Airline, CEO Says

According to the airline's bankruptcy petition, its debt to creditors was $797 million or 65.21 billion Indian rupees

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INDIA: Go First filed for bankruptcy the day before its chief executive made his remarks, citing “faulty” Pratt & Whitney (P&W) engines for the forced grounding of roughly half of its fleet.

CEO Kaushik Khona stated that the airline would not be sold due to the insolvency proceedings and that all essential payments had already been made to Pratt & Whitney.

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The airline also aimed to deter lessors from taking any action. The business claimed that several parties had shown interest in the airline and that it is “continuously evaluating options”. No other information was provided.

According to the airline’s bankruptcy petition, its debt to creditors was $797 million or 65.21 billion Indian rupees.

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Go First’s bankruptcy could increase airfares in India, allowing other local airlines to take a bigger piece of the market. IndiGo, India’s largest airline, saw its share prices rise 8.2% earlier and 5.1% on Wednesday.

Jefferies analyst Prateek Kumar warned that if the suspension is prolonged, other airlines may attempt to fill the slots left open by Go First and seize market share. Indigo has handled the crisis better due to its larger fleet size and superior talks with the vendor.

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Given that the two airlines’ fleets are similar, lessors might be ready to assign some of the Go First planes to IndiGo, according to Credit Suisse analysts. They said that such a move would help IndiGo gain market share and produce higher yields when there is a shortage of aircraft.

On Wednesday, lending to Go First decreased, with Central Bank of India, Bank of Baroda, IDBI Bank, and Axis Bank among the institutions that experienced a decline. According to its filing for bankruptcy, Go First owes its creditors $798 million or 65.21 billion rupees.

The Wadia Group owns Bombay Dyeing and Manufacturing Co. and Britannia Industries. Bombay Burmah Trading, which provided loans to Go First, saw a 5% decline in value due to inter-corporate deposits.

Also Read: United Airlines Boeing 777 Descends to 775 Feet above Pacific Ocean

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