India’s budget airline Go First has been in the news for not-so-good reasons. The airline has a lot on its plate, from operational issues such as flight delays and cancellations to the problem with Pratt & Whitney regarding the engines of its grounded planes. Its finances have also taken a hit, with the airline receiving loans and cash infusions over the months. And now, another cash infusion for Go First is reportedly coming very soon.
More funds
Go First is reportedly set to receive another financial boost through loans and cash infusion. The airline’s finances took a huge hit last financial year as it struggled to manage daily operations with limited capacity. It reportedly lost around $219 million in 2022-23.
The airline has also occasionally taken loans and financial support from promoters to stay afloat. And now, it has been reported that Go First will receive another loan of around $36.5 million as part of the Indian government’s Emergency Credit Line Guarantee Scheme (ECLGS). In October 2022, the government decided to increase the credit limit for the aviation sector under this special scheme that was announced during the COVID pandemic.
The carrier will receive another $36.5 million from its promoters to keep operations steady. It has already received cash infusion to the tune of $366 million in the last 15 months to stay afloat.
Get the latest aviation news straight to your inbox: Sign up for our newsletters today.
Partnership
The latest development comes soon after it was reported that Go First’s owners, the Wadia Group, could sell a majority stake or look to exit the airline business altogether. But a source told the Press Trust of India (PTI) that the promoters are going nowhere and, in fact, are putting more cash into the company. There are also talks of expanding the partnership in the business, with a source saying,
“We can obviously evaluate a good partnership but it does not mean that we are out to sell … Indian aviation is getting a lot of traction, and there are some reports that some airlines, some entrepreneurs are looking at (investing in the airline segment), that is why we are happy to look at (any investment proposal).
“But if somebody asks us whether we are open for partnerships, that we can evaluate when it comes to us. But it does not mean that we are on the block.”
Struggling
Any help is good news for Go First, which has seen better days. With reports of frequent flight delays and cancellations to the DGCA imposing fines due to non-compliance with procedures, Go First has had rough few months.
Check out more Indian aviation news here.
Then there’s the ongoing issue of its grounded planes awaiting new engines and spares, prohibiting the airline from taking full advantage of the travel rebound. While the P&W engine issue will likely remain for some time, hopefully, the latest financial help will be the start of better things for the carrier.
What are your views on this? Please leave a comment below.
Source: PTI via The Economic Times