Go First Airlines Draws Interest from SpiceJet, Sefric Investments, and Sharjah: Potential Sale Amid 6,521 Crore Debt
Three Companies Bid to Purchase Go First Airlines
Three companies, SpiceJet, Africa’s Safaricom Investments, and Sharjah-based Aviation Company SkyOne, are expressing interest in acquiring Go First, the budget airline. According to The Economic Times, these three companies have requested an extension for the bidding deadline to allow for more time to finalize their bids. The decision on extending the bidding date will be made by the consortium of lenders in the coming days.
The latest bidding deadline for the acquisition of Go First was November 22, 2023, but no purchase offer was made until then. Now, as the three companies have shown interest, it is expected that the consortium of lenders may agree to extend the deadline for the bidding process.
This development suggests that the potential buyers see value in acquiring Go First and are actively participating in the bidding process. The extension of the bidding date will provide them with additional time to prepare and submit their final offers for the acquisition of the airline.
Go First Airlines Creditors to Receive INR 6,521 Crores
Go First Airlines will be paying its creditors a total of INR 6,521 crores. In an announcement on January 19, credit rating agency ICRA revealed that the Central Bank of India has the highest exposure with INR 1,987 crores, followed by Bank of Baroda with INR 1,430 crores, Deutsche Bank with INR 1,320 crores, and IDBI Bank with INR 58 crores.
The airline decided to suspend all its flights from May 3 to May 5. The reason cited for the grounding was the unavailability of engine supply, as American aircraft engine manufacturer Pratt & Whitney (PW) failed to deliver engines on time. Due to this, Go First had to ground a significant portion of its fleet, leading to substantial financial losses. The company incurred a loss of around INR 8.9 thousand crores in the last three years due to engine troubles.
The grounding not only impacted the revenue but also led to cost-saving measures, including the grounding of aircraft. The airline faced challenges in procuring fuel and had to save money for refueling. This situation, combined with the inability to fly, caused financial distress for the airline.
The company’s CEO, Kaushik Khona, has claimed that the grounding of aircraft due to engine issues has caused significant financial losses. The funds will now be allocated to meet the dues of various creditors.
Go First Airlines: A Brief Overview
Go First is a budget airline under the Wadia Group. According to the company’s website, Go First was launched on April 29, 2004. The airline commenced its operations in November 2005 with its first flight from Mumbai to Ahmedabad. The airline operates a fleet of 59 aircraft, including 54 A320 NEO and 5 A320 CEO.
Out of these, 35 destinations are covered, including 27 domestic and 8 international locations. Over the years, Go First has undergone a rebranding, changing its name from GoAir to GoFirst in 2021. The airline has been serving passengers since its inception, focusing on providing affordable and efficient air travel services.
