With 2024 now more than halfway through, Air Malta, Armenia’s FlyArna, Canada’s Lynx Air and Antigua and Barbuda’s LIAT are just some of the airlines that have filed for bankruptcy.
Particularly when the airline was the only one serving a smaller nation, this came down to filing for protection and working out an emergence plan with lenders and the country’s government. In other cases, continuing operations stopped being feasible and the airline simply ceased operations and left anyone with booked flights stranded. When Air Vanuatu suddenly canceled all its flights back in May, a group of Australian voluntourists ended up getting rescued from the small South Pacific nation by a cruise ship.
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Over in India, low-cost carrier Go First is now heading into liquidation after an effort to find buyers to cover its debt of 65.21 billion rupees (roughly $781.14 million USD) was not approved by lenders.
Bids ‘fell short of lenders’ expectations,’ creditors say
As first reported by Reuters, the Committee of Creditors representing the defunct airline unanimously voted to instead liquidate. Choosing to remain anonymous, one of the bankers said that “it makes no sense to keep pumping in more money” into Go First. The creditors had set an Aug. 3 deadline for those interested in taking over the airline to step up or raise their bids.
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“Bidders were given adequate time to review and raise their bids, but even that fell short of lenders’ expectations,” the banker said further.
Founded in 2005 and operating a fleet of exclusively Airbus A320 (EADSF) planes, Go First initially found a market running low-cost flights between different cities across India but eventually started racking up debts amid increased competition.
While it was able to emerge from the flight slowdown during the pandemic, Go First ran into its biggest challenges amid the global recall of the Pratt & Whitney engines without which it was unable to run its planes. By the end of 2022, it was forced to ground nearly half of its fleet of 54 planes and eventually filed for voluntary insolvency before India’s National Company Law Tribunal in May 2023.
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‘Making it further unfeasible for Go First to continue its operation’
“The culmination of these actions will result in a severe depletion in the number of aircraft available for Go First to operate going forward, thereby making it further unfeasible for Go First to continue its operation and meet its financial obligations,” the airline said at the time.
Creditors speaking to Reuters on condition of anonymity said that the liquidation process will start in the coming months once formal applications are filed and approved and will take the form of both a sell-off and aircraft producers and lenders taking back their planes.
Potential buyers included the founder of Indian low-cost airline SpiceJet Ajay Singh and Indian online travel booking platform EaseMyTrip founder Nishant Pitti, but both were ultimately scared off by the high amount of debt and withdrew their proposals. The airline was also floating around the idea of an IPO between 2015 and 2021, but the accruing financial problems kept putting it off until the Pratt & Whitney engine recall placed the final nail in the airline’s coffin.
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