Go First crisis pushes airfares higher, staff face uncertain times

June 02, 2023 19:10

From a surge in airfares to rattled aircraft lessors to thousands of employees staring at uncertainty, it has been a month of continued turbulence since cash-strapped Go First suspended flights from May 3.

As the government and other stakeholders hope that Go First restarts operations at the earliest, plans are being worked out for the budget airline's revival.

A section of Go First staff are optimistic about restarting of operations, another section are pessimistic about the airline's future course considering what had happened to erstwhile Kingfisher Airlines and Jet Airways, according to employees who spoke to PTI.

Earlier this week, senior executives of Go First discussed the revival plans with senior officials of the Directorate General of Civil Aviation.

Apart from the uncertainty staring at more than 7,000 Go First staff, a significant fallout is the spike in air ticket prices on certain routes that used to be serviced by the airline, which was operating around 170-180 flights daily.

The crisis at Go First, having its roots in non-availability of Pratt & Whitney engines resulting in grounding of more than half of its operational A320 neo fleet, reached a flash point as the promoters of the carrier decided to suspend flights and sought voluntary insolvency resolution proceedings on May 2.

The airline has not flown since May 3 and its petition for the insolvency proceedings was admitted by the National Company Law Tribunal (NCLT) on May 10.

Also, many lessors who have leased planes to the no-frills carrier have challenged the insolvency proceedings as they seek to exercise their rights to take back the aircraft despite the moratorium on the carrier's financial obligations and transfer of assets.

Travel portal Cleartrip's Vice President - Air Category - Gaurav Patwari said the significant capacity reduction due to Go First being non-operational has contributed to the spike in airfares.

"There is a sharp spike in fares especially for travel within D15 which can be attributed to the ongoing Go First issue. The fares within D15 travel have increased by 22 per cent and at the aggregate level up by more than 20 per cent over April for domestic travel," he said.

Generally, D15 refers to booking 15 days before travel.

"The spot fares in May have risen significantly versus April primarily due to peak season demand and a reduction in capacity due to the grounding of Go First, thereby creating an imbalance in demand and supply. The fares in D0 to 1 window are up by 40 per cent. We expect the current scenario to continue till mid of June," he said. -- PTI

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