Go First: After one year of grounding, resumption of operations still unclear
Go First: After one year of grounding, resumption of operations still unclear
It must have been the hardest Wednesday on May 3, 2023, for the management of Go First and thousands of employees as the airline suspended its flights and announced bankruptcy. It claimed it didn’t have the financial bandwidth to sustain operations with half of its fleet grounded due to Pratt & Whitney engine issues.
Before stalling operations, the Wadia Group promoted carrier had filed a petition on May 2, 2023, with the National Company Law Tribunal (NCLT), for voluntary insolvency resolution. It had also sought an interim moratorium to prevent the seizure of its 26 aircraft by aircraft lessors. The plea was admitted by the tribunal on May 10 imposing a moratorium on the company.
“This is a historic and landmark judgment. It is also a perfect example in the context of revival of a viable business before it becomes unviable,” former CEO Kaushik Khona had said after the NCLT verdict.
However, Khona stepped down from his position at the airline on November 30, 2023, and left an emotional parting note for the airline’s employees.
He said non-payment of salaries despite ‘several requests’ and the Resolution Professional’s failure to revive the airline has led him to leave the airline.
“I regret I could not get things done as they were beyond my control and I seek pardon for any of you feeling that I may have hurt during my tenure and hope you will pardon me,” Khona said in a letter to employees.
When Khona had already quit, Go First received an Expression of Interest from Jindal Power but the company later withdrew from the bidding process.
Around the same time, the Resolution Professional (RP) sought an extension of the deadline to complete the resolution process. The NCLT granted an extension of 90 days till February 4, 2024.
While that deadline was also nearing, Go First found four suitors — Ajay Singh of SpiceJet, Sharjah-based Sky One, African continent-focused firm Safrik Investments and Florida-based aviation company NS Aviation — who expressed interest in buying the airline. But not all stayed put. Only Ajay Singh, Sky One and a new contender Busy Bee submitted bank guarantees and a formal expression of interest.
The RP again sought more time and the NCLT extended the deadline by another 60 days from February 4 to April 4.
Things changed as days passed. Go First had two serious bidders. On February 16, SpiceJet said its Chairman Ajay Singh and Busy Bee Airways have submitted a joint bid for Go First. EaseMyTrip’s Nishant Pitti later revealed he represents Busy Bee. The second bid was from Sky One.
“It is noteworthy, holding the majority shares of Busy Bee Airways Pvt Ltd, I have, under my personal capacity, supported a joint bid to resurrect the airline in the interest of the employees and all its stakeholders,” Nishant Pitti posted on X on February 17.
On April 8, the NCLT granted a further extension of 60 days for the resolution process, marking the third extension given by the tribunal. The new deadline is set for June 3.
However, what drastically changes the revival roadmap going forward is the Delhi High Court’s April 26 verdict in favour of the lessors. And obeying that order, the Director General of Civil Aviation (DGCA) has de-registered all 54 leased aircraft of Go First.
This raises some fundamental questions. Will the two bidders still be interested in buying an airline that has no aircraft? Is liquidation the most likely outcome of this long-stretched resolution process? The last one year has kept several employees, vendors, travel agents and passengers hoping for the airline’s revival. Lessors may have won the case, but do they get to fly their aircraft abroad and are the planes in a condition to be flown after staying grounded for several months? It has been a tumultuous year for all stakeholders and the airline’s restart still remains unclear.