India's largest conglomerate, Tata Group, and the country's largest airline, IndiGo, are reportedly in discussions to acquire Airbus SE planes from Go Airlines India Ltd. This comes after the carrier filed for insolvency protection and was instructed to halt ticket sales.
According to a Bloomberg report, sources familiar with the matter have revealed that the Tata Group and IndiGo are currently in separate negotiations with Go First's lessors.
Additionally, the two companies are also engaged in discussions with airport operators in New Delhi and Mumbai regarding landing and parking slot arrangements. It has been disclosed that Go First's lessors are seeking to repossess 36 aircraft, which is evident from filings made with India's aviation regulator.
According to the report, multiple other parties have also expressed their interest in acquiring the airport slots. One of the interested parties mentioned is Akasa Air, a recently established airline, as per sources.
The high demand for Go First's assets could potentially create hurdles for the airline's debt restructuring plans and efforts to resume operations.
On Monday, May 8, the Indian aviation regulator instructed Go First to halt ticket sales, which is reminiscent of the similar action taken against Vijay Mallya's Kingfisher Airlines about a decade ago.
Unfortunately, Kingfisher Airlines never resumed operations after that. Go First's fate hangs in the balance as a verdict on whether the airline can retain its operating licence is expected to be announced within the next two weeks.
Sky High XCV Leasing Ltd, ACG Aircraft Leasing Ireland Ltd, and SMBC Aviation Capital Ltd are among the major lessors for Go First.
Go First was established in 2005 under the leadership of business tycoon Nusli Wadia. The airline has stated that the Pratt & Whitney engines installed on its A320neo aircraft had degraded at a faster rate than anticipated, resulting in premature failure.
According to the airline, it had to replace over 500 Pratt GTF engines from 2016 until February 2023. As a result, several aircraft had to be taken out of service, leading to losses worth Rs 10,800 crore ($1.3 billion) for the airline.
Raytheon Technologies Corp's subsidiary Pratt & Whitney has previously said the issue faced by Go Air is being dealt within legal courts. It also stated that their priority is to ensure timely delivery schedules for all their customers.
A shortage of new commercial jetliners due to supply chain disruptions and a faster-than-expected recovery in travel demand after the pandemic have created an opportunity for companies like Tata and IndiGo to expand their fleets.
Tata has acquired the formerly state-run Air India and is integrating its brands, including local ventures of Singapore Airlines Ltd and Capital A Bhd’s AirAsia.
InterGlobe Aviation Ltd-managed budget airline IndiGo carried almost 60 percent of the Indian domestic market by flying 7.3 million passengers in March.
With inputs from Bloomberg
(Edited by : Shoma Bhattacharjee)
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