Indian multinational conglomerate and owners of Go First, the Wadia Group, is considering exiting the airline or selling a significant portion of its stake. The budget carrier has been struggling lately with operations, with many of its planes grounded. It has taken loans over the months as well as received cash infusions from the owners, but the efforts have not been enough.
Looking for an exit?
A report by The Economic Times (ET) states that the owners of budget airline Go First are keen on selling a significant stake or looking to exit the business completely. The Wadia Group is reportedly talking with partners and stakeholders to discuss these plans.
Go First has been in the news lately for its operational challenges, as more than half of its fleet is grounded due to a lack of spares and engines. It has tried to stay afloat by taking government loans and cash from its owners, but it continues to remain under operational stress. The ET quotes an official familiar with the matter as saying,
“It is a difficult situation that is being tackled. We are burning money with our aircraft on the ground. We have spent ₹3,000 crore ($366 million) in the last 15 months to keep the airline afloat. All options are being considered, and multiple scenarios have been planned. The last option, unfortunately, will be to exit the airline business.”
Recent setbacks
While other airlines in India are pulling themselves out of the COVID-induced slump and looking forward to profitable quarters amid a rise in travel, Go First has not been able to take advantage of the situation.
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Per ch-aviation, the carrier currently has 28 active aircraft, while 31 of its Airbus A320s are inactive. The main reason behind this is the supply chain issues faced by Pratt & Whitney, which has been unable to meet its delivery targets. Another official told ET,
“Almost 60% of Go First planes are on the ground due to the engine supply issues that have yet to be sorted out with P&W, and that has led to huge losses for the airline in an otherwise upbeat market.”
The airline accumulated heavy losses in 2022 and has not had a good operational run in a long time. Flight delays and cancellations have increasingly crept into its schedules as it struggles to meet demand with the existing active fleet.
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Not too long ago, the airline was looking to launch an IPO, but COVID delayed that development. But its current issues seem to have taken a toll on its current owners, who now reportedly feel that it’s time to step away from the airline. There has been no official announcement from the Wadia Group, so it’ll be interesting to see how this plays out in the coming days.
What do you think about Go First’s current woes? Please leave your comments below.
Source: The Economic Times
