Indigo, Spicejet Share Price: As airline Go First filed for voluntary insolvency on Tuesday, the share price of competitors, Indigo, or InterGlobe Aviation, soared 8.2% in trade while Spicejet stock prices flew 5.5%. Since Go First owes its financial creditors almost $800 million or Rs 65.21 billion rupees, shares of the cash-strapped airline’s lenders tanked in trade. The shares of Central Bank of India sank 7.2% and Bank of Baroda slipped up to 4.1%, while private lenders, IDBI Bank and Axis Bank, saw their stock prices tank 3% and 1.1% respectively. The company’s parent, Wadia Group, also owns Britannia Industries and Bombay Dyeing & Manufacturing’; both the firms’ share prices crashed on the bourses, falling up to 5%.
Go First Insolvency
The airline has not defaulted on its dues yet, “however, considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent,” said the company in a filing to the National Company Law Tribunal, adding, “Currently, the assets of the company are not sufficient to meet its liabilities.” Go First stated that the engines provided by Pratt & Whitney were faulty, the “ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines” resulted in half the airline’s fleet being grounded.The airline has also suspended operations from 3 May to 5 May.
Go Air’s voluntary insolvency is the first major airline collapse since Jet Airway’s bankruptcy filing in 2019, amid a sector characterised by its fierce competition. Currently, Tata Group’s acquisition of Air India and its subsequent merger with Vistara dominated the headlines, while Indigo remains as traveler’s primary choice of airline.