- SpiceJet chairman Ajay Singh and Busy Bee Airways bid for grounded Go First, aiming for revival.
- Strategic partnership sees SpiceJet offering operational support to Go First.
- Go First halted operations in May 2023 due to financial challenges, including Pratt & Whitney engine issues.
- Collaboration aims to leverage Go First’s assets like airport slots and Airbus Neo plane orders.
- SpiceJet announces workforce reduction of 15% to save costs amidst industry pressures.
- NCLT grants Go First a 60-day extension for insolvency resolution, with three potential buyers showing interest.
- Earlier extension given due to Jindal Power’s withdrawal from bidding process after financial scrutiny.
SpiceJet Chairman Ajay Singh Introduction :
SpiceJet chairman and managing director Ajay Singh, along with Busy Bee Airways Private Ltd, have submitted a joint bid for the grounded Go First airline, signalling a dramatic shift in the aviation market.
Rejuvenating Go first :
Go First ceased operations on May 3, 2023, citing financial difficulties caused mostly by Pratt & Whitney engine troubles, and entered into an insolvency resolution process. Ajay Singh voiced confidence in Go First’s prospects, citing the opportunity for rejuvenation through a strategic alliance with SpiceJet.
Strategic partnership :
SpiceJet’s plan entails becoming an operating partner, leveraging its knowledge, critical staff, and services to support the new version of Go First. Singh emphasised the importance of Go First’s assets, which include valuable airport slots, international traffic rights, and a significant order for Airbus Neo planes.
Synergy and Benefits :
SpiceJet and Go First’s combination is expected to result in significant benefits, including enhanced cost management, revenue growth, and a stronger market position in the Indian aviation sector. The harmonisation of resources and capabilities between the two carriers promises to improve operational efficiency.
Cost-Cutting Measures :
In combination with its strategic moves, SpiceJet announced plans to decrease its workforce by 15%, or around 1,500 personnel. This project intends to produce significant cost savings, estimated at roughly Rs 100 crore per year, demonstrating the company’s dedication to financial survival during industry headwinds.
NCLT Extensions and Buyer Interest :
The National Company Law Tribunal (NCLT) awarded Go First a 60-day moratorium extension, giving them more time to complete its corporate bankruptcy resolution process. With three possible purchasers expressing interest and submitting monies, Go First’s resolution specialist requested an extension to ensure a smooth transaction.
Extension Background :
This extension follows a prior 90-day extension granted on November 23, 2023, that expired on February 4, 2024. Jindal Power’s withdrawal from the bidding process, following a comprehensive review of Go First’s financial accounts, necessitated additional time to find a suitable buyer.
Conclusion :
SpiceJet’s partnership with Busy Bee Airways is a strategic effort to revitalise Go First by harnessing synergies and industry knowledge to negotiate the difficulties of the aviation sector. The extension granted by the NCLT emphasises the need of reaching a sustainable settlement for Go First, guaranteeing continuity and stability in the Indian aviation sector.