SpiceJet, Busy Bee Airways submit joint bid for Go First
SpiceJet chairperson Ajay Singh has teamed up with Busy Bee Airways to bid for troubled carrier Go First. If successful, this partnership could lead to a more consolidated market with fewer but larger players competing for the top spot. By joining the ranks, SpiceJet and Busy Bee hope to improve cost management, increase revenue, and establish a strong market presence using SpiceJet's existing resources and technical know-how. Following this news, SpiceJet shares closed 11.28% up at Rs. 70.81.
Potential benefits and challenges for SpiceJet
For SpiceJet, this deal could mean better resource allocation and cost savings in areas like maintenance, ground handling, and engineering. Aligning flight schedules and destinations strategically could also boost passenger traffic and ticket sales. However, merging two airlines is no easy task, with challenges such as employee integration, brand consolidation, and regulatory obstacles. The success of this bid hinges on SpiceJet's ability to tackle these issues and create a unified company.
Go First is undergoing bankruptcy process
Go First, previously named as Go Air, suspended its operations and filed for bankruptcy in May 2023. The airline was ailing with cash flow issues. This is mainly attributed to the grounding of its 25 Airbus A320neo aircraft which were frequently reporting engine failures. The airline used to enjoy a share of almost 7% in India's aviation industry and carried 29,000 passengers on a daily basis. It operated almost 200 flights on a daily basis.
