Aviation stocks rally as Go First files for insolvency

New Delhi: Shares of InterGlobe Aviation, the parent of IndiGo, and SpiceJet jumped on Wednesday after Go First sought voluntary insolvency resolution proceedings and decided to cancel flights for three days starting May 3.

InterGlobe Aviation stock climbed 4.52 per cent to settle at Rs 2,163.90 on the BSE. During the day, it rallied 7.99 per cent to Rs 2,235.95 -- its 52-week high.

Shares of SpiceJet gained 1.40 per cent to end at Rs 31.93. In intra-day, it zoomed 5.58 per cent to Rs 33.25.

Cash-strapped Go First on Tuesday sought voluntary insolvency resolution proceedings and decided to cancel flights for three days starting May 3, as the budget airline is unable to meet financial obligations amid the grounding of half of its fleet due to non-availability of Pratt & Whitney engines.

Go First, which has been flying for more than 17 years, cancelled all flights for three days -- May 3, 4 and 5 -- and promised to make a full refund to the customers. It operates around 180-185 flights, carrying around 30,000 passengers on a daily basis.

Airline's CEO Kaushik Khona said the airline has grounded 28 planes, more than half of its fleet, due to non-supply of engines by Pratt & Whitney (P&W), and that has resulted in a fund crunch.

The Wadia group-owned carrier has moved the National Company Law Tribunal (NCLT), Delhi, seeking voluntary insolvency resolution proceedings.

Go First is the second major scheduled airline after Jet Airways to seek resolution under insolvency proceedings.

Meanwhile, SpiceJet on Wednesday said it is working to revive 25 grounded planes and has so far mobilised Rs 400 crore for revival of these aircraft.