AT A CURTAIN-RAISER recently to announce the next edition of Asia's largest civil aviation event, Wings India 2024, Rémi Maillard, President of Airbus India and MD of South Asia, raised eyebrows when he described the Mumbai-based low-cost carrier (LCC) Go First's bankruptcy filing as a "depressing development". The event was attended, among others, by Jyotiraditya Scindia, Minister of Civil Aviation, the entire top brass of the Ministry of Civil Aviation, and members of the diplomatic corps. Maillard's assessment was in sharp contrast to the usually bullish forecasts put out by the Toulouse-based plane-maker on India, the world's fastest-growing aviation market.
Go First, which was operating with an all-Airbus fleet, filed an application for voluntary insolvency with the arbitrator, the National Company Law Tribunal (NCLT) on May 2, and suspended all flight operations, taking the global aviation industry by surprise. Promoted by the over 250-year-old Wadia Group, the airline has cited troubles with engine-maker Pratt & Whitney's next-generation engines as the reason behind the grounding of its entire fleet. Soon after the news broke, experts told Business Today that the development might create a negative perception of the Indian aviation market. With more than 40 aircraft still on lease to Go First, leasing firms are literally waiting in the wings to repossess their aircraft.
TROUBLE IN THE AIR
1 With the suspension of flights by Go First and the revival of Jet Airways now in limbo, market sentiment has been negatively impacted
2 Airfares, especially on routes serviced by Go First, have jumped due to capacity contraction
3 A rise in lease rentals and insurance premiums paid by Indian carriers is likely to make air travel costlier
This story is from the June 11, 2023 edition of Business Today India.
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This story is from the June 11, 2023 edition of Business Today India.
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