SpiceJet CMD Ajay Singh, along with Busy Bee Airways, on Friday submitted a bid for grounded airline GoFirst, according to a statement.
“Ajay Singh, chairman and managing director of SpiceJet, and Busy Bee Airways Private Limited, have jointly submitted a bid for GoFirst. The bid has been submitted by Ajay Singh, in his personal capacity, along with Busy Bee Airways Private Limited,” budget carrier Spicejet said in the statement.
SpiceJet’s role as the operating partner for the new airline involves providing essential staff, services, and industry expertise, according to the statement.
Following the report, shares of Spicejet jumped as high as 12 per cent. The stock finally settled at 70.81, which was Rs 7.18 or 11.28 per cent higher as compared with the previous close.
This collaboration is anticipated to generate synergies between the two carriers, leading to improved cost management, revenue growth, and a strengthened market position within the Indian aviation industry, it said.
“I firmly believe that GoFirst holds immense potential and can be revitalized to work in close synergy with SpiceJet, benefiting both carriers. Apart from coveted slots at domestic and international airports, international traffic rights, and an order for over 100 Airbus Neo planes, GoFirst is a trusted and valued brand among flyers. I am happy to contribute to the efforts aimed at reviving this popular airline and leveraging its strengths for mutual growth and success,” Ajay Singh said.
For SpiceJet, serving as the service provider presents significant opportunities for revenue expansion. By leveraging its established infrastructure and operational capabilities, SpiceJet can optimize resource allocation and achieve cost efficiencies across various functions, including maintenance, ground handling, and engineering, it said.
“Furthermore, coordinated route planning initiatives are poised to enhance passenger traffic and drive ticket sales for both airlines. By strategically aligning their flight schedules and destinations, SpiceJet and the new airline can capture a larger share of the market and cater to diverse passenger needs effectively,” it said.
The bid, submitted on Friday (February 16, 2024), marks a significant strategic move that has the potential to reshape the landscape of the Indian aviation sector and position SpiceJet for substantial growth in the industry, it said.
SpiceJet is currently in the midst of a revival plan, having successfully completed the first tranche of capital infusion amounting to Rs 744 crore, with additional subscriptions pending regulatory approval. The company has also initiated the process to raise an additional Rs 1,000 crore. SpiceJet already holds valid shareholder approval to raise up to Rs 2,500 crore through QIP, eliminating the need for further shareholder approval.
Earlier this week, the National Company Law Tribunal (NCLT) extended the deadline for 60 days to complete the resolution process of grounded airline Go First.
This was the second such extension granted by the NCLT. The NCLT had on November 23 last year granted an extension of 90 days, which ended on February 4.
The three firms, including budget carrier Spicejet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments, showd interest in buying Go First.
NCLT had admitted the plea of Go First to initiate voluntary insolvency resolution proceedings On May 10. The airline stopped flying on May 3.
