Go First, a company providing budget airline service, has been running in heavy losses for a long time. The employees of the company are not getting salary on time. More than half of the fleet of about 60 aircraft are standing on the ground, and the upcoming IPO to raise money also does not seem to be coming soon considering the market conditions. Is GoFirst going to meet the same fate as Kingfisher?
Before looking at the present condition of ‘Go First’, its beginning has to be seen. In the year 2005, Jeh Wadia, son of Nusli Wadia, made up his mind to start the airlines business. At that time Vijay Mallya started his full service airlines ‘Kingfisher’. Aviation business was a new glamor then.
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Not having a concrete business plan
Wadia Group did not have any concrete plan to start this business. Rather, for Nusli Wadia, who did business like Britannia Industries and Bombay Dyeing, it was just another business. While the airlines that started exactly one year after this was the main business of the airlines for IndiGo.
This had an impact on the operations of the company. According to a news from ET, Captain G., who started the country’s first budget airlines Air Deccan. R. Gopinath says that GoFirst just kept itself operational. For this, the company has to make a strategy to move forward, a policy for the growth of pilots, engineers and staff.
GoFirst still operates a fleet of only 59 planes, while its rival IndiGo has become an airline with 100 aircraft in the year 2014 and now has more than 300 aircraft.
Covid and Pratt & Whitney engine crisis
Go First didn’t have any big plan. In the year 2021, Jeh Wadia was freed from the responsibility of all the companies and airlines of the Wadia Group and sent to London. At the same time, due to Kovid, the condition of airlines companies remained bad for a year. Pratt & Whitney engine crisis became ‘itch in leprosy’ in this whole matter.
GoFirst’s fleet consists of Airbus A321 Neo planes. The company preferred other versions of the same aircraft even while buying new aircraft. Most of these have engines from the Pratt & Whitney company. In July last year, when 45 aircraft of the company were flying, suddenly within 3 months, 24 of its aircraft were grounded due to engine failure.
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Today, 25 of the company’s 59 aircraft are unable to take off due to engine problems and 4 due to problems in the landing gear. This has adversely affected the operations of the company.
How will be the future strategy?
Sources in the know of Go First’s affairs say that the company is facing a substantial challenge from new entrants like Air India and Akasa Airlines. Wadia Group has also invested Rs 3000 crore in the last 15 months to keep the company running. While Rs 600 crore has also been raised from the government’s Emergency Credit Line Guarantee Scheme.
On the other hand, the Wadia family is planning to take promoter exit from Go First. For this, work is going on on two plans, either to add a strategic partner in the company, or to come out of this business by selling the stake.