Airline Source Confirms Go First Openness to Partnerships; Wadias to Stay in Aviation Business

An airline source has disclosed that Go First, owned by the Wadia Group, is open to partnerships but not planning to divest from the loss-making aviation business. The sources believe that the airline’s engine issues have caused a loss of Rs 1,800 crore in 2022-23. A source closely associated with the carrier’s management revealed that the company will infuse around Rs 600 crore into the company in the coming weeks.

Despite holding an 8-10% market share for several months, the airline’s market share declined to 6.9% in March due to the grounding of a significant portion of its aircraft fleet. The source stated that although they are open to considering potential investment proposals, they are not intending to sell the company. They added that Indian aviation is gaining significant traction, and some airlines and entrepreneurs are reportedly exploring the possibility of investing in the airline sector.

“He said that while we can evaluate partnership opportunities if they come to us, it does not necessarily mean that we are actively seeking them or already committed to any,” in response to questions about their openness to partnerships.

He stated that several factors, including COVID-19 and fuel prices, among others, hindered domestic aviation earlier. However, since October of last year, things have improved significantly, with better yields and load factors.

Go First Airline

A source stated that the airline’s promoters are contributing an additional Rs 300 crore in equity, while banks have sanctioned funds worth Rs 300 crore under the Emergency Credit Guarantee Line Scheme. As a result, the airline should receive the full Rs 600 crore within the next 3-4 weeks.

By regularly infusing capital into the airline, it has been able to not only remain operational but also expand its fleet.

Sources reported that the airline grounded 25 of its Airbus A320Neo aircraft, and 180 aircraft with GTF-powered engines are grounded and awaiting engines globally, currently, only 36-37 aircraft operate said sources.

The airline received a total of 18 engines, with 17 received in December helping to recover eight aircraft and one in March. The company will deliver the supply balance from March by May, and they will also deliver two more engines in April. Initially, the engine manufacturer had scheduled to deliver 20 engines to Go First by March.

The airline has a backlog of 50 engines, and upon delivery, will be able to put 25 more aircraft back into operation, according to the source. In the past 24 months, the airline has added eight new aircraft but postponed the delivery of two aircraft.

According to the source, the airline can suffer losses of approximately Rs 1,800 crore in FY 2023, including Rs 800 crore in notional losses due to accounting standards. They estimate that the actual cash outflow will be Rs 1,000 crore.

Also Read: Latest Indian Aviation News and Aviation News

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