Go First bankruptcy: A look at airlines grounded in 3 decades

New Delhi/ Mumbai: One scheduled airline on an average has gone out of business every year since private airlines took to the skies nearly three decades ago, with Wadia group-owned Go First being the latest carrier battling financial turbulence for survival.

The first private airline to go belly up was East West Travels & Trade Link Ltd, which shuttered operations after almost two years in November 1996. The same year, ModiLuft Ltd also went out of business.

Since 1994, the year when private airlines took off in the country, at least 27 scheduled carriers have either been shuttered or have been acquired or merged with other carriers, according to official data.

While the country's domestic aviation sector is on an upswing with strong traffic recovery post-pandemic, Go First is grappling with severe financial crunch due to non-availability of Pratt & Whitney engines that has resulted in grounding of more than half of its fleet.

Three scheduled airlines -- Zexus Air Services Pvt Ltd, which operated as Zoom Air; Deccan Chartered Pvt Ltd and Air Odisha Aviation Pvt Ltd -- shut shop in 2020 while Heritage Aviation Pvt Ltd stopped flying in 2022.

Once a storied full service carrier, Jet Airways shuttered operations in April 2019, bogged down by financial woes and is yet to restart operations even though a winning bidder has been found through the insolvency resolution process.

Jet Lite (formerly known as Sahara Airlines) stopped operations in 2019.

Another prominent player that was forced to stop flying was Kingfisher Airlines Ltd in 2012. Prior to that, Kingfisher Airlines, in 2008, had acquired Deccan Aviation Pvt Ltd (Air Deccan). The latter was the pioneer of low-cost air travel in the country.

In 2017, at least five carriers went bust -- Air Carnival Pvt Ltd, Air Pegasus Pvt Ltd, Religare Aviation Ltd, Air Costa and Quikjet Cargo Airlines Pvt Ltd.

Deccan Cargo & Express Logistics Pvt Ltd (2014), Aryan Cargo Express (2011), Paramount Airways (2010), MDLR Airlines Pvt Ltd (2009), Jagson Airlines Ltd (2008) and Indus Airways Pvt Ltd (2007) are among the other carriers that closed down.

While two airlines went belly up in 1996, NEPC Micon Ltd and Skyline NEPC Ltd (formerly known as Damania Airways Ltd) shuttered operations in 1997. Lufthansa Cargo India Pvt Ltd stopped flying in 2000, as per the official data.

Go First, which has been flying for more than 17 years, has filed for voluntary insolvency resolution proceedings and cancelled all its flights for three days starting Wednesday.

The airline is the second major scheduled carrier after Jet Airways that is likely to undergo resolution process under the Insolvency and Bankruptcy Code (IBC).

After being pushed into insolvency proceedings by its lenders, Jet Airways found its new owner Jalan Kalrock Consortium (JKC), but the ownership transfer is hanging fire amid persisting differences between the lenders and the winning bidder.

India is one of the fastest growing civil aviation markets in the world and the number of passengers are rising. State-owned Air India and Air India Express were acquired by Tata Group in January last year.

Currently, all carriers, except state-owned Alliance Air, are private ones.

About Go First, Sanjiv Kapoor, who quit as CEO-Designate of Jet Airways recently, on Wednesday said it is sad to see another airline suspend operations.

"This is in addition to the lengthy delays in getting Jet off the ground again. This is not good for consumers, to be heading towards concentration of such a large market to just 2 or 3 players. Need at least 4 strong airlines," he said in a series of tweets.

According to him, there needs to be at least two strong Full Service Carriers (FSCs) and two or three strong Low Cost Carriers (LCCs) in a market of this size and complexity.

"By 'strong' airlines I mean well capitalised, well-managed airlines that run safe, reliable, and efficient operations with well-maintained aircraft, well-trained staff, and consistent service, creating customer preference and thereby creating value for all stakeholders," he said.

It was curtains down for the monopoly of corporations in scheduled air transport services space in March 1994 when the government repealed the Air Corporation Act, 1953. The move marked the liberalisation of domestic air transport services, allowing the entry of private operators.

Back in May 1953, with the enactment of the Air Corporations Act, 1953, the government nationalised the airline industry. 

Two air corporations -- Indian Airlines Corporation and Air India International -- were established and the assets of all the then existing nine air companies were transferred to the two new corporations.