Friday, December 02, 2022

India's Go First secures extra $49.4mn in gov't funding

Ultra-low-cost Indian carrier Go First received an additional INR4 billion rupees (USD49.4 million) in government funding in November, taking the total amount of monies that the airline has accessed via India's Emergency Credit Line Guarantee Scheme (ECLGS) to at least INR8 billion (USD98.8 million). The revelation coincides with the news that Go First has just taken delivery of its fifty-fifth A320-200N and is moving to resolve ongoing problems with the delivery of Pratt & Whitney engines that is resulting in the grounding of dozens of aircraft.

In October, the Indian government raised the amount able to be accessed via ECLGS from INR4 billion to INR15 billion (USD184.7 million), opening the way for Go First to tap into additional capital. This follows a report in The Economic Times saying "promotors" behind the airline had poured in INR28 billion (USD344.8 million) over the past 15 months to keep Go First afloat. The airline is owned by the Wadia Group, a diversified Mumbai-based conglomerate. Wadia has been eyeing an Go First IPO and filed a draft prospectus in 2021 but then missed the Securities and Exchange Board of India (SEBI) imposed 12-month deadline to get the offering up and running. The IPO, which aimed to raise around USD460 million, would have given the airline the cash to pay down substantial amounts of debt.

Meanwhile, Go First took receipt of its newest A320-200N on November 30, taking the total fleet size to 60 aircraft. However, at least twenty-five of the planes are grounded because Go First cannot secure the delivery of Pratt & Whitney engines. The unavailability of engines has been impacting the airline's ability to maintain its scheduled services, with rising cancellations and reliability issues generating considerable adverse publicity across India.

According to the ch-aviation PRO airlines module, Go First flies to 38 destinations in seven countries, including the UAE, Saudi Arabia, Thailand, and the Maldives. Indian on-time performance (OTP) data covering October reveals the airline's OTP was just 60.7% and its market share dropped from 7.9% to 7% across the same month.

02/12/22 ch-aviation

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