Go First crisis: After aircraft de-registration, EaseMyTrip founder withdraws bid | Latest News India - Hindustan Times

Go First crisis: After aircraft de-registration, EaseMyTrip founder withdraws bid

May 25, 2024 05:47 PM IST

Go First, which filed for bankruptcy in May last year, had received two financial bids as part of its bankruptcy process

New Delhi: Go First faced another setback after one of its bidders, EaseMyTrip, announced the withdrawal of its bid. The defunct airline had 54 aircraft in its fleet that have been grounded since May 3 last year. Earlier this month, the Directorate General of Civil Aviation (DGCA) de-registered all its 54 aircraft. 

 (Representative Photo)
(Representative Photo)

Go First, which filed for bankruptcy in May last year, had received two financial bids as part of its bankruptcy process. SpiceJet chairman and managing director Ajay Singh submitted a bid along with Busy Bee Aviation Pvt. Ltd, in which EaseMyTrip has a 51% stake. Sharjah-based Sky One Aviation also bid for the airline. 

Now catch your favourite game on Crickit. Anytime Anywhere. Find out how

On Saturday, EaseMyTrip’s founder and CEO Nishant Pitti said the company has decided to withdraw its bid for the airline. Pitti was part of a consortium, led by Singh, which had submitted the highest bid of Rs.1,600 crore.

However, hopes for the airline’s revival were quashed after the Delhi high court on April 25 ordered the DGCA to deregister all their aircraft.

“After careful consideration, I have decided to withdraw from the GoAir bid in my personal capacity. This decision allows me to better focus on other strategic priorities and initiatives that align with our long-term vision and growth objectives. Our commitment to delivering exceptional value and service remains unwavering as we continue to navigate new opportunities and challenges,” Pitti, Founder & CEO of EaseMyTrip, said. 

Go First, formerly owned by the Wadia group, ceased all its operations in the peak summer rush, severely impacting the Indian passengers. It is soon expected to lose all its slots since the airline has not been able to utilise any of them for more than a year.

Go First was the fifth largest airline in India based on scheduled departures. 

“Sadly it’s curtains for Go First,” Mark D Martin of Martin Consultancy said.

“Though if lessors reached a settlement with the airline on switching from Pratt and Whitney (whom Go First said was the cause of their grounding) to CFM leap engines, GoFirst could have been saved,” he added.

The airline with 54 aircraft in its fleet had around 90% Pratt & Whitney (PW) engines. Go First claimed that PW’s engines had been failing since the first deliveries in 2017 and the ever-increasing number of failing engines caused severe cash flow issues. 

It filed for bankruptcy protection within a week of shutting down operations and blamed PW for engine-related issues that forced it to do so. It is currently embroiled in a legal battle with P&W at the Singapore Court of Arbitration in which the airline has claimed about Rs.8,000 crore in compensation.

Also Read: GoFirst’s last stand with two suitors in the wings: Understanding airline insolvency in India

Go First and IndiGo in India faced huge supply chain issues due to the Covid-19 pandemic in 2020. However, minor issues were faced around 2017. Marker leader IndiGo was able to sustain the revenue losses due to the grounding of aircraft because of its strong financial position.

The non-availability of spare parts and a delay in the supply of retrofitted engines from the engine maker led to major flight cancellations for the Go First post-pandemic. 

“The death of an airline in a developing country is not seen as a good indicator for the aviation sector. Go first is not the first one. We have seen the painful deaths of Sahara, Kingfisher, and Jet Airways in the last two decades. Despite constant economic growth, infrastructural upgrading, increasing passenger footfall if there is an event of an airline going out of runway, it raises questions on the overall ecosystem, governance and solidity of the sector,” said Brajesh Singh, President, Arthur D. Little India Pvt. Ltd. 

“Go First’s going out of business has impacted the Indian aviation sector’s image and also whether the market is conducive to foreign/homegrown airlines. It is high time to relook, review and come up with more industry-conducive frameworks,” Singh added. 

Go First is the second airline in India going through an insolvency process — the first being Jet Airways, which is still stuck in various courts despite finding a suitor for the airline. 

Get World Cup ready with Crickit! From live scores to match stats, catch all the action here. Explore now!

See more

Get Current Updates on India News, Budget 2024, Weather Today along with Latest News and Top Headlines from India and around the world.

Share this article
Story Saved
Live Score
Saved Articles
My Reads
Sign out
New Delhi 0C
Friday, June 21, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On