Go First close to shutting down, cancels flights till February
Go First is facing potential closure after entering bankruptcy protection in May and failing to find a rescuer. The airline's CEO, Kaushik Khona, stepped down in November, admitting he couldn't revive the airline and revealing that employees hadn't been paid for six months. Earlier today, Go First announced on X that all scheduled flights were canceled until February 4, extending a grounding that started in May.
Jindal Power decided not to bid for Go First
Jindal Power Ltd., the only possible buyer in Go First's insolvency resolution process, chose not to bid for the struggling carrier. Local media reported that Jindal couldn't determine Go First's value due to uncertainty about how many planes it would have after the aviation regulator indicated its aircraft should be returned to lessors. Go First, which has 54 grounded Airbus SE A320neos, did not comment on the situation.
Liquidation likely as resolution process stalls
Sandeep Bajaj, a lawyer who represented some operational creditors in Jet Airways India Ltd.'s insolvency case, believes that Go First's resolution process is going nowhere and that liquidation is necessary. He added that it's rare for closed businesses to be revived. According to Harsh Vardhan, chairman of New Delhi-based Starair Consulting, grounded airlines can lose landing and parking slots, staff, planes, licenses, and International Air Transport Association-assigned codes used for schedules and ticketing.
Challenges faced by Go First
High operating costs, especially for fuel, and the need to offer discounted fares challenged Go First. The global aviation industry suffered during the pandemic, with at least 68 airlines entering bankruptcy protection. Supply chain congestion worsened Go First's problems, as half of its fleet was grounded while waiting for parts and replacement engines from Pratt & Whitney.
Indian aviation market dominated by IndiGo and Air India
Despite Go First's struggles and those of other carriers, India's two largest airlines, IndiGo and Air India, have secured a combined market share of 73%. They placed record orders for over 900 new aircraft from Airbus and Boeing Co. this year. Akasa Air, supported by late billionaire Rakesh Jhunjhunwala, launched in August 2022 and has already captured around 4% of the market. It also emerged as the most punctual airline in India last month.
