IndiGo responds to reports on buying majority stake in crisis-hit Go First airline

India’s largest carrier IndiGo on Thursday said that it cannot comment on the rumours that it is trying to buy a majority stake in the embattled airline Go First, controlled by the Wadia Group.   

It has been reported that IndiGo will be merging its operations with the debt-ridden carrier, which had sought initiation of voluntary insolvency proceedings and imposition of an interim moratorium under the Insolvency and Bankruptcy Code (IBC) last month.  

"IndiGo is aware about certain media reports stating that IndiGo has expressed an interest in Go First.  IndiGo does not comment on market speculation and remains focussed on its growth strategy," an IndiGo official told CNBC TV18 on Thursday. 

Earlier, a Gujarati daily had reported that IndiGo is considering merging with Go First and several meetings have taken place in this regard.  

According to the report, the merger and acquisition deal can take up to five years. IndiGo is currently the biggest airline in terms of market share and fleet size and controls almost 70 per cent of the Indian market.

Recently, IndiGo in its Q4 results reported a profit of Rs 919 crore, with a jump of 76.5 per cent in revenue.  

Go First cancels flights 

Earlier in the day, Go First further extended flight cancellations until June 12, citing operational reasons. It added that it will resume bookings shortly. 

 The airline has stopped issuing tickets after it temporarily ceased operations on May 3. Last week, the low-cost airline had announced the suspension of flight operations until June 7. 

Go First said it will issue a full refund to passengers' original mode of payment.  

Go First insolvency proceedings 

In the month of May 2, Go First said it was “forced” to apply to the National Company Law Tribunal Delhi (NCLT) for resolution and protection under Section 10 of IBC due to the ever-increasing failure of Pratt and Whitney engines that power its fleet. IndiGo also has around 37 airplanes that are grounded due to P&W engine issues. 

In its bankruptcy filing to NCLT, Go First said it owes Rs 6,521 crore ($797.38 million) in total to Bank of Baroda, IDBI Bank, and Deutsche Bank, which are its financial creditors. 

The airline has further said it has a total liability of about Rs 11,463 crore to banks, other creditors, vendors, and others. 

The low-cost carrier was granted bankruptcy protection by NCLT on May 10 and appointed Abhilash Lal as IRP to look into its operations.