Indian LCC SpiceJet is proposing a plan to bring grounded carrier Go First out of bankruptcy and combine the two airlines.
SpiceJet issued a formal expression of interest (EOI) to take part in Go First’s insolvency resolution process. In a letter to the resolution professional overseeing the Go First bankruptcy, SpiceJet stressed it has submitted “a viable resolution plan for the revival of Go First.”
SpiceJet said its “proposed combination [between] the company and Go First will provide synergy and [a] sustainable business model for revival of Go First in the present competitive environment.”
The deadline for submitting EOIs has already passed and did not yield any bidders for Go First. However, SpiceJet has asked that its EOI and revival plan be considered.
SpiceJet noted that it has recently initiated the process of raising $270 million in fresh capital, which is partly intended to be used to invest in growth.
Despite this, SpiceJet has itself been in a fragile financial condition. Earlier in 2023, the carrier’s auditors noted that its liabilities exceeded its assets by a significant margin, threatening its ability to continue as a going concern.
SpiceJet issued shares to one of its largest aircraft lessors to settle debts, but some of its lessors applied to reclaim aircraft from SpiceJet or sought to launch bankruptcy proceedings.
The carrier operates a fleet of about 35 Boeing narrowbodies, including 13 737 MAXs, with eight jets inactive. It has 140 MAXs remaining on order.
Go First nominally has a parked fleet of more than 50 Airbus narrowbodies. However, lessors are fighting to reclaim these aircraft. An Indian court is currently considering whether a bankruptcy moratorium applies to the Go First fleet.
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