Plane-less Go First's situation 'painful'; muted hopes for a tailwind

Mumbai/ New Delhi: Last May, it all started with flight suspension for just three days and "an unfortunate decision" of voluntary insolvency resolution option taken to protect the airline's interests.

A year down the lane, the now plane-less Go First's fate remains uncertain and come June, there are revival expectations, though muted, when the extended deadline for the resolution process ends.

There are concerns that the airline might even be pushed into liquidation, experts opined.

"It is extremely painful to see that even after one year, the airline has not been able to revive the operations," the budget carrier's former chief Kaushik Khona told PTI.

Since May 3, 2023, Go First has not taken to the skies, with its blue and white livery A320 planes gathering dust at airports, most staff leaving and many staring at uncertain times, and a resolution process still remaining on the tarmac.

Hopes of a quick revival further faded, as the carrier's 54 planes have been deregistered after protracted legal battles and lessors will be taking away the aircraft.

The contrails of the Go First insolvency process also left trails of concerns not only about the grounded airline's trajectory but also about the rights of lessors provided under the Cape Town Convention.

Khona, who was at the helm when the more than 17-year-old airline filed for the voluntary insolvency resolution proceedings, said the staff were optimistic that operations could be resumed from August 2023.

"The loss of a good, customer friendly airline which always offered affordable fares and which treated all its customers with the best comfortable journey on its youngest fleet has been a huge loss for all the customers... The revival was always possible and I hope people who are at the helm do it even now," he said.

According to industry sources, the revival looks difficult but the airline has a lot of value left.

Among others, the airline had made a pre-delivery payment of around USD 200 million to Airbus towards its second order for 72 planes. The first order by the carrier was for 72 aircraft, they added.

The sources also mentioned the airline's lawsuit worth about USD 3 billion against P&W.

Management consultancy Primus Partners' Managing Director Shravan Shetty said Go First seems to be headed unfortunately towards liquidation with the cost of revival increasing.

"This will be another case of value destruction due to an elongated NCLT process which points to a need to put measures in place to nudge creditors to close cases quickly," he said.

Sources said some domestic carriers might eye the deregistered aircraft, as the lessors cannot fly them out due to non-availability of engines and spare parts, also various approvals are required.

Against this backdrop, lessors might also look to negotiate leasing these planes to Indian carriers, as they can be more cost effective, the sources added.

Cut to the insolvency resolution process, the deadline for completing the process has been extended by the National Company Law Tribunal (NCLT) till June 3.

Two bidders are in the fray for Go First -- Busy Bee Airways, along with SpiceJet chief Ajay Singh, and Sharjah-based aviation entity Sky One.

In a statement, Sky One Chairman Jaideep Mirchandani said the Delhi High Court's directive adds the "much-needed clarity to the situation, aligning with our commitment to transparency and fairness in the bidding process." He also claimed that by bringing its own aircraft and expertise, Sky One is poised to successfully revive Go First.

After the court order, the DGCA has deregistered the 54 aircraft but lessors are likely to take more time to fly them out of the country, as many of the planes need engines and spare parts.

On April 26, when the court ordered deregistration of Go First's 54 planes, travel portal EaseMyTrip's Co-Founder and CEO Nishant Pitti said on behalf of Busy Bee Airways that they will review the details of the order.

Following this review of the court order, it will evaluate the position and consider any necessary adjustments to the proposed offer for Go First, he had said in a post on X.

We have acknowledged the judgment issued by the Delhi High Court on April 26, 2024. We will review the details of the order once we receive the official document. Following this review, we will evaluate our position and consider any necessary adjustments to our proposed offer for…

— Nishant Pitti (@nishantpitti) April 26, 2024

Pitti is a majority shareholder in Busy Bee Airways.

Meanwhile, the insolvency resolution process of Jet Airways, which stopped flying back in April 2019, is still not complete.

On May 2 last year, Khona told PTI that the airline has grounded 28 planes, more than half of its fleet, due to non-supply of engines by Pratt & Whitney (P&W) that has resulted in a fund crunch.

"It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company," he had said.

And the wait continues.