Lenders of Go First, formerly known as GoAir, have set January 31 as the crucial deadline for financial bids to acquire the airline, according to a Reuters report. The airline, grappling with financial challenges, filed for voluntary insolvency proceedings on May 2, attributing its dire situation to engine failures from Pratt & Whitney (P&W).
Go First, labeled as cash-strapped, initiated voluntary insolvency proceedings with the National Company Law Tribunal (NCLT) in May. The airline placed blame on Pratt & Whitney for its financial crisis, asserting that the increasing number of failing engines supplied by the manufacturer led to the grounding of 25 aircraft, constituting half of its Airbus A320neo fleet.
In response to the crisis, Go First took the drastic measure of canceling all its flights starting from May 3, and as of now, the airline has not resumed operations. The prolonged suspension has undoubtedly added to the challenges faced by the airline, impacting both its reputation and financial stability.
About Go First Airlines:
Recent developments indicate that lenders, faced with the difficulty of securing new investors, are contemplating the possibility of liquidating the airline. However, in a recent turn of events, banks have decided to give the resolution process another chance, allowing interested suitors to submit concrete bids before pursuing liquidation.
Several entities have expressed interest in acquiring Go First. SpiceJet, after conducting due diligence, announced its consideration of an offer for the troubled airline. Additionally, Sharjah-based Sky One, Africa-focused Safrik Investments, and U.S.-based NS Aviation have reportedly shown interest, contributing to the complexity of the resolution process.
Go First’s bankruptcy filing reveals a significant debt owed to various creditors, including Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, totaling $784.38 million. The resolution process is closely watched by these creditors, whose cooperation is essential for any successful revival or acquisition.
As the January 31 deadline looms, the fate of Go First remains uncertain. The airline’s journey through insolvency proceedings, creditor obligations, and potential acquisition bids underscores the challenges faced by the aviation industry, especially during times of economic uncertainty. The resolution of Go First’s financial turmoil will undoubtedly have repercussions on the broader aviation landscape and serve as a case study for similar situations in the future.