SpiceJet CMD Ajay Singh, along with Busy Bee Airways, on Friday submitted a bid for grounded airline GoFirst, according to a statement.
“Ajay Singh, chairman and managing director of SpiceJet, and Busy Bee Airways Private Limited, have jointly submitted a bid for GoFirst. The bid has been submitted by Ajay Singh, in his personal capacity, along with Busy Bee Airways Private Limited,” budget carrier Spicejet said in the statement.
SpiceJet’s role as the operating partner for the new airline involves providing essential staff, services, and industry expertise, according to the statement.
Following the report, shares of Spicejet jumped as high as 12 per cent. The stock finally settled at 70.81, which was Rs 7.18 or 11.28 per cent higher as compared with the previous close.
This 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, it said.
“I firmly believe that GoFirst holds immense potential and can be revitalized to work in close synergy with SpiceJet, benefiting both carriers. Apart from coveted slots at domestic and international airports, international traffic rights, and an order for over 100 Airbus Neo planes, GoFirst 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,” Ajay Singh said.
For SpiceJet, serving as the service provider presents significant opportunities for revenue expansion. By leveraging its established infrastructure and operational capabilities, SpiceJet can optimize resource allocation and achieve cost efficiencies across various functions, including maintenance, ground handling, and engineering, it said.
“Furthermore, coordinated route planning initiatives are poised to enhance passenger traffic and drive ticket sales for both airlines. By strategically aligning their flight schedules and destinations, SpiceJet and the new airline can capture a larger share of the market and cater to diverse passenger needs effectively,” it said.
The bid, submitted on Friday (February 16, 2024), marks a significant strategic move that has the potential to reshape the landscape of the Indian aviation sector and position SpiceJet for substantial growth in the industry, it said.
SpiceJet is currently in the midst of a revival plan, having successfully completed the first tranche of capital infusion amounting to Rs 744 crore, with additional subscriptions pending regulatory approval. The company has also initiated the process to raise an additional Rs 1,000 crore. SpiceJet already holds valid shareholder approval to raise up to Rs 2,500 crore through QIP, eliminating the need for further shareholder approval.
Sky One confirms to bid for GoFirst
Sky One Chairman Jaideep Mirchandani has also confirmed the bid submission for GoFirst airline.
Sky One is headquartered in Sharjah, United Arab Emirates, and specialises in a wide array of aviation services.
“We had sent their EoI (expression of interest) and have now submitted the bid for GoFirst and look forward to the next stage. Given our vast aviation experience across the globe, we are confident about the acquisition,” Mirchandani said.
The bids are submitted to resolution professional (RP) for consideration by the Committee of Creditors, this stage qualifies the bidders that hope to turn the airline’s financial woes around if the bid turns successful.
Mirchandani added that Indian aviation is at the cusp of unprecedented growth and Sky One was glad to play a part in it.
“The prospects of growth in India are a big reason for exploring the acquisition. GoFirst comes with coveted slots at domestic and international airports, international traffic rights and a substantial user base, which makes it a reliable bet for us.”
In 2023, GoFirst encountered difficulties regarding the availability of Pratt & Whitney engines utilised across its entire A320 aircraft fleet, asserting that this issue was significantly affecting its operations.
Consequently, on May 3, 2023, the airline suspended its operations and submitted a voluntary insolvency application to the National Company Law Tribunal.
Sky One was among the bidders in the race to buy the government’s stake in helicopter services company Pawan Hans last year and has been making strategic acquisitions across the globe in the aviation sector as well as pilot training.
GoFirst At NCLT
Earlier this week, the National Company Law Tribunal (NCLT) extended the deadline for 60 days to complete the resolution process of grounded airline GoFirst.
This was the second such extension granted by the NCLT. The NCLT had on November 23 last year granted an extension of 90 days, which ended on February 4.
The three firms, including budget carrier Spicejet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments, showed interest in buying GoFirst.
NCLT had admitted the plea of GoFirst to initiate voluntary insolvency resolution proceedings On May 10. The airline stopped flying on May 3.
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