Impact of SpiceJet promoter’s bid for bankrupt Go First on budget carrier industry

SpiceJet’s managing director, Ajay Singh, and Busy Bee Airways have jointly submitted their bid for GoFirst airline, SpiceJet said on Friday. Weighed down by financial troubles, Go First ceased operations in May last year and is currently undergoing an insolvency resolution process.

In a statement on Friday, SpiceJet said that the bid was submitted by its chief Singh in a personal capacity. SpiceJet will be an operational partner for the new airline, supplying essential staff, services, and industry expertise. The collaboration is anticipated to generate synergies between the two carriers, leading to improved cost management, revenue growth, and a strengthened market position within the Indian aviation industry.

Ajay Singh, who is the chairman and managing director of SpiceJet, believes that Go First has a lot of potential and by working closely with SpiceJet, both airlines can benefit. “Apart from coveted slots at domestic and international airports, international traffic rights, and an order for over 100 Airbus Neo planes, Go First is a trusted and valued brand among flyers. I am happy to contribute to the efforts aimed at reviving this popular airline and leveraging its strengths for mutual growth and success,” he said in the release.

Having filed for bankruptcy in May last year, Go First is currently indebted to its creditors, including Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, with a total owed amount of ₹6,521 crore. SpiceJet shares experienced significant buying activity during Friday’s trading session. The share price opened higher today, reaching an intraday peak of ₹71.90 each, marking a notable 13 per cent increase from Thursday’s closing price of ₹63.63 on the National Stock Exchange.

In summary, SpiceJet’s managing director, Ajay Singh, has submitted a bid for bankrupt GoFirst airline, aiming to revive the popular airline and leverage its strengths for mutual growth and success. With hopes of generating synergies and improving cost management, SpiceJet’s collaboration with GoFirst is expected to strengthen their market position within the Indian aviation industry.