Go First’s Slots Hang In Balance As Revival of Operations Remains Uncertain
Rivals were vying for these slots even before Go First’s application for voluntary insolvency proceedings was admitted.
The fate of Go First’s valuable slots at major metro airports, temporarily allotted to peers in the peak travel season, hangs in the balance as uncertainty persists over when the beleaguered budget airline will resume operations.
Rivals were vying for these slots even before Go First’s application for voluntary insolvency proceedings was admitted as India's booming civil aviation sector faces capacity constraints.
The government has reportedly given these slots on an interim basis to airlines that can fly more flights in this peak summer travel season, according to an Economic Times report. Once Go First resumes operations, they will go back to the airline.
Go First has suspended operations until May 23, after a series of announcements extending the suspension from days to weeks.
Its approved summer schedule for the domestic market showed that it had more than 500 permissions to operate flights, depending on the weekly frequency, at seven major airports, including Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Ahmedabad, and Kolkata.
The low-cost carrier also had a strong network of leisure destinations such as Leh, Srinagar, and Goa.
Last minute airfares rose 80-120% week-on-week on Delhi-Srinagar, Delhi-Leh and Mumbai-Goa routes after Go First suspended operations, data shared by online travel company Ixigo showed. On other major metro routes, the fares increased by 40-60%.
These permissions to land or take off are valuable assets for an airline, especially at major metro airports where the airlines traditionally make most of their revenues.
However, how many of them the cash-strapped airline will be able to use remains uncertain, as the revival will be with a much-deteriorated fleet size.
"The new network plan depends on the plan the court-appointed Insolvency Resolution Professional puts out," said Mark Martin, founder and chief executive officer at the aviation consultancy Martin Consulting.
But even with the rest of the airlines willing to grab the opportunity, it will cost them more than usual.
With scheduled jet deliveries facing delays due to supply chain issues, airlines are forced to wet lease aircraft from other airlines. A wet-leased aircraft comes with the crew of the leasing airline and at a higher cost compared with a dry-leased aircraft under the dominant sale and lease-back model in India.
The companies that leased aircraft to Go First are challenging the admission of Go First’s voluntary insolvency proceedings, saying a freeze on the airline’s assets stops them from getting back their aircraft.
It will also shake the confidence of the international aviation industry amid perceptions of the Indian aviation sector being a risky business, one of the lessors said in the appeal.