Go First owner has no plans to exit airline: CEO (updated)

Bombay Burmah Trading,

03/05/2023 11:47

( Repeats story first published 3rd May 23, headline update
TEST)
    By Tanvi Mehta, Chris Thomas, Dhanya Skariachan
       BENGALURU, May 3 (Reuters) - Go Airlines (India) Ltd
owner Wadia Group is completely committed to the airline and had
no plans to exit it, the airline's chief executive told Reuters
in an interview on Wednesday.
His comments came a day after the cash-strapped Indian airline
filed for bankruptcy, blaming "faulty" Pratt & Whitney (P&W)
engines for the grounding of about half its fleet.
    The insolvency proceedings were aimed at reviving the
airline and not selling it, CEO Kaushik Khona said, confirming
it had made all required payments to Pratt & Whitney.
    The airline was also looking to dissuade lessors from taking
action.
    “The Indian government is very keen we should not fail,”
Khona told Reuters.
    The company, which is “continuously evaluating options”,
said some parties have expressed interest in the airline. It did
not share further details.
     Go First’s lenders will most likely meet on Wednesday to
discuss what to do next after the bankruptcy filing on Tuesday,
two bankers aware of the development told Reuters.
  
     The airline owed financial creditors 65.21 billion Indian
rupees ($797 million), its bankruptcy filing showed. As of April
30, Go First had not defaulted on any of those loans, it said in
the filing seen by Reuters.
  
     
  
     BOON FOR RIVALS
  
     Go First's bankruptcy may boost airfares in India and give
other domestic airlines a chance to grab a larger chunk of the
market share, analysts said.
    Share prices of India's largest airline, IndiGo  INGL.NS ,
were up 5.1% on Wednesday, after rising as much as 8.2% earlier.
    "If the suspension is prolonged, other airlines that are
adding capacity would look to avail the slots vacated by Go
First and grab onto the market share," Jefferies analyst Prateek
Kumar said in a client note.
    "Indigo is facing a similar problem with P&W engines for
some of its fleet but has been able to better maneuver the
crisis owing to its much larger fleet size and better
negotiations with the vendor," Kumar added.
    Lessors may also be eager to allocate some Go First aircraft
to IndiGo, given a similar fleet type, Credit Suisse analysts
wrote in a note, adding that such a development would benefit
IndiGo in terms of market share and stronger yields in a
capacity-strained environment.
Lenders to Go First, including Central Bank of India  CBI.NS ,
Bank of Baroda  BOB.NS , IDBI Bank  IDBI.NS  and Axis Bank
 AXBK.NS , fell on Wednesday. Go First owes creditors 65.21
billion rupees ($798 million), its bankruptcy filing showed.
    The Wadia Group also runs bread and biscuits maker Britannia
Industries  BRIT.NS  and textile firm Bombay Dyeing and
Manufacturing Co  BDYN.NS . Share prices of Bombay Burmah
Trading  BBRM.NS , which is also owned by Wadia and has given
loans to Go First in the form of inter-corporate deposits, slid
5%.
     
     
    ($1 = 81.8450 Indian rupees)

(Reporting by Tanvi Mehta, Chris Thomas and Dhanya Skariachan in
Bengaluru; Additional reporting by Siddhi Nayak in Mumbai;
Editing by Dhanya Ann Thoppil, Savio D'Souza and Gerry Doyle)
((mailto:chris.thomas@thomsonreuters.com; +91 80 6210 0487;))