GO FIRST drowned! Investors are anticipating earnings in Indigo.| GO FIRST will immerse ₹11,463 crore.

 

GO FIRST drowned! Investors are anticipating earnings in Indigo:

Go First is in poor condition. This is the second time in the last five years that a major airline is going to shut down. The company does not even have money to run flights, the application for appointment of resolution of Go First will be heard in National Company Law Tribunal i.e NCLT on Thursday. 

Meanwhile, an opportunity has come for other airlines as they can benefit from the closure of Go First operations. Go First passengers can shift to another airline. For this reason, good buying is being seen in the other company. On Wednesday, Indigo shares closed at ₹2,165, up 5%. Jet Airways also closed at ₹60 with an upper circuit of 5% and SpiceJet closed at ₹32 with a gain of 1.5%. 

Overall, investors are expecting earnings in Indigo after Go First ceases operations. Investors feel that Go First's market share will go to other companies. However, no one knows which airlines can take how many shares in these shares. India's aviation market has reached close to pre-covid level and the number of air travelers is expected to increase this year.

ICRA had predicted improvement in domestic passenger traffic. According to this, domestic passenger traffic may increase by 8 to 13% in the current financial year. With this, it will reach 145 to 150 million, which is much higher than the pre-covid level. On 30 April 2023, India's domestic air traffic reached new heights with time, according to government data.

On this day, 4,56,082 passengers traveled in 2,978 flights. In total flights 5,947 including total passengers of 9,13, 336 this figure has also crossed the average before covid-19 pandemic. In such a situation, it can be understood that now this sector is taking full advantage of the increase in the speed of tourism. In such a situation, the closure of GoFirst is a big opportunity for other airline companies to increase their business.

GO FIRST will immerse ₹11,463 crore:

The country's 6th-largest airline company Go First is on the verge of sinking. The airline has canceled all its flights for May 3, 4, and 5. After this, the anger of the passengers who reached the airport erupted. People who set out for the journey were seen standing in line and getting worried about their ticket refund. Some were talking about shutting down the airline, while some were crying over the arbitrariness of the flight. 

Along with this, many new things came to light one after the other regarding Go First on Wednesday. First of all, the CEO of the company Kaushik Khona has rejected the news of bankruptcy coming from the airline and made it clear that the company has applied to the resolution process and not for bankruptcy.

Gofirst has filed an application in NCLT seeking help on ways to save the assets of the airlines. With this, the names of the banks which have given loans to go first have now come to the fore. These banks include the names of many big banks like Bank of Baroda, and IDBI Bank, Axis Bank. The airline has to pay ₹6521 crore dues to these banks.

Central Bank of India and Deutsche Bank are also among Go firsts' financial creditors, according to filings made through Gofirst. According to the filing, the exposure of the Central Bank of India to Gofirst is ₹1561.6 crore. Bank of Baroda has an exposure of ₹1429.82 crore. Axis Bank has given ₹30 crores as a loan.  

IDBI Bank has an exposure of ₹58.58 crores and Deutsche Bank has an exposure of ₹1320 crores. The special thing is that the airline has not made any mistake in the installment of any lander till April. By the way, considering the current financial condition of the corporate applicant, it is estimated that the installments may stop in the coming months. 

However, the CEO of Go First says that the promoters have given a piece of land to banks as collateral security, which is worth more than ₹ 3000 crore. He said that the banks have had security for the last few years and also assured the airline banks to get their money back.He said that we are having regular talks with the banks. 

We have continuously told the top management of the banks what is the situation in this matter. On the other hand, talking about the total liability, the total liability of Gofirst is ₹ 11463 crore. This includes dues of banks, financial institutions, vendors, and aircraft lessors. According to information, Gofirst has defaulted on payment to operational creditors. In this, ₹ 1202 crore is the vendors' money. 

The same is for about 2660 crore aircraft lessors. Explain that Gofirst, which is facing a cash crunch, has blamed the American engine maker for this. The airline says that only 50% of its fleet is operational. This is because they are not getting spare engines from American firm Pratt & Whitney. 

The airline has been having trouble keeping up with its flights due to a growing number of failures of engines shipped from Pratt & Whitney, but it is not the only problem. Got Gofirst in this situation. It is also surrounded by crises due to frequent changes in management. This is the reason that now the passengers have to face difficulties.

Gofirst has 61 aircraft, but due to the non-flying of half of the aircraft, Go first's earnings kept decreasing continuously. Now DGCA has sent a notice to Gofirst on stopping the flights. The airline has been asked to respond within 24 hours. At the same time, Civil Aviation Minister Jyotiraditya Scindia has said that efforts will be made to save the airline.

On the other hand, Go First said that if Pratt & Whitney completes the engine supply, the airline will be fully operational again in August-September 2023. Go First was started in the year 2005 by the Wadia Group. It is the 6th largest airline company in the country. The company operates its flights on the 36 airlines route. 

At the beginning of Corona, the company had stopped operating its flight on the international route. Since then the condition of the company is bad. For the last few months, Wadia Group was also looking for a big investor, but no one was interested to invest in Gofirst. Eventually, now the company had to decide to cease its operations and decided to go into the bankruptcy process.

Now the question is what will happen to the pilots, support staff, and employees now working at GoFirst. Will airlines continue their operations after the three-day shutdown?