SpiceJet’s Singh vies with Sky One in bidding for Go First

Committee of Creditors will need to approve resolution plan before NCLT’s nod is sought

February 16, 2024 09:06 pm | Updated 09:35 pm IST - NEW DELHI

SpiceJet promoter Ajay Singh. File

SpiceJet promoter Ajay Singh. File | Photo Credit: Reuters

SpiceJet promoter Ajay Singh and Sharjah-based aviation company Sky One on Friday submitted competing bids for bankrupt airline Go First.

Mr. Singh, who is the chairman and managing director of the publicly held company that operates the budget carrier, submitted a bid in his personal capacity along with Busy Bee Airways Private Limited, which counts among its largest shareholders Nishant Pitti, a co-founder of the travel booking portal EaseMyTrip.

The National Company Law Tribunal had on February 13 granted a second extension for Go First’s corporate insolvency resolution process -- giving it another 60 days until April 4. The committee of creditors would now meet to vote on the resolution plan submitted by the bidders, which would then be presented before the insolvency court, said people closely involved with the process who spoke on condition of anonymity.

Mr. Singh’s acquisition of Go First, if successful, would lead to “synergies between the two carriers, leading to improved cost management, revenue growth, and a strengthened market position within the Indian aviation industry,” SpiceJet said in a statement. It added that the airline operator’s role as the “operating partner” for the revived carrier would involve providing essential staff, services, and industry expertise.

SpiceJet had only recently announced cost-cutting measures to save up to ₹100 crore, including plans to lay off up to 1,400 staff members.

“Go First comes with coveted slots at domestic and international airports, international traffic rights and a substantial user base, which makes it a reliable bet for us,” Sky One’s chairman Jaideep Mirchandani said in a statement.

Go First suspended flight operations in May amid financial difficulties, which it attributed to faulty Pratt & Whitney engines that had forced the grounding of 27 of its 54 planes, and approached NCLT for voluntary insolvency resolution. Lessors have since moved to deregister all planes in its fleet over pending dues, and the Delhi High Court is expected to give its order on the matter soon.

Industry sources said that leases for the 54 aircraft had been terminated and the new owners would have to renegotiate lease agreements if they wanted to reacquire the planes. The value of Go First therefore may only lie in its airport slots, bilateral route rights, as well as the aircraft pending for delivery from Airbus..

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