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April 18, 2024
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The prospects of Go First, the grounded Indian carrier, got brighter with two of the three potential bidders confirming their bids.

Ajay Singh, the promoter of LCC, SpiceJet, and Busy Bee Airways Private Limited (BBAPL) have jointly submitted a bid (Ajay-Singh-^0-Busy-Bee-Airways-Private-Limited-Submit-Bid-for-GoFirst.pdf) to revive Go First. BBAPL is an Indian company involved in Non-Scheduled air transport services.

Jaideep Mirchandani, Chairman of Sky One, also confirmed submitting a bid. “We have submitted the bid for Go First and look forward to the next stage – which is due diligence. Given our vast aviation experience across the globe, we are confident about the acquisition. Indian aviation is at the cusp of unprecedented growth, and we are glad to play a part in it.” Mirchandani, Chairman, Sky One said.

Ajay Singh

In a statement, SpiceJet said that Singh submitted his bid on Friday in his personal capacity. Incidentally, this is the second time that Singh has submitted a bid to run an airline in India.

When the Indian government was trying to privatize Air India apart from Tata Sons, it was only Ajay Singh in the fray. At that time, it was speculated that Singh had bid to save the divestment process, as the Indian government’s rules do not allow a government entity to be divested if there is only a single bidder. Singh, who is said to be close to the party in power at the Centre in India, later joined the race for AI in his personal capacity. Eventually, Tata Sons won the bid to run AI in 2021.

The news of  Singh and BBAPL’s bid broke three days after the National Company Law Tribunal (NCLT) extended the Corporate Insolvency Resolution Process for Go First by 60 days until April.

If Singh and BBAPL are successful in their bid, they will succeed in getting not only market share but also more international routes. Go First, which ceased operations in May last year, operated to Abu Dhabi, Muscat, Bangkok, Dubai, and Kuwait, besides routes in India.

Winning Go First also allows Singh to restart negotiations with Airbus to supply Airbus A320NEO aircraft. In January 2017, Go First (then Go Air) placed a firm order for 72 Airbus NEO aircraft, taking the total number of NEOs on firm order by the airline to 144,

Commenting on the bid by Singh, Satyendra Pandey, Managing Partner, Aairavat Technology & Transport Ventures Private Ltd, said that if the bid is successful, it will bring with it benefits for SpiceJet, mainly the addition of capacity, slots, and bilaterals, and market share while also helping bring finality to the Go First insolvency.

“The release by SpiceJet speaks to a structure where SpiceJet is the operating partner and provides essential staff, services, and expertise. Which also means that there is no expectation of capital infusion from SpiceJet,” Pandey says, adding, “Interestingly, the bid, if successful, helps build for an interesting negotiation position with Boeing and Airbus as between the airlines there are large outstanding orders with both OEMs.”

However, he points out that it will require complex coordination between Go First because of the insolvency, the airline’s claims against Pratt and Whitney, and the very different fleet and network characteristics of SpiceJet. A combined entity is complementary in many ways but requires management and governance structures that align.

Sounding a note of caution, Pandey says that success is not a guarantee. “As has been seen in the case of Jet 2.0, even after a successful bid, multiple challenges remain, and these have to be deftly navigated while flying through an environment of intense competition,” he says.

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Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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