The travel industry has been hit hard by the COVID-19 pandemic, and the latest news from Go First is not making things any easier. The airline, which has been flying for more than 17 years, has been struggling with an acute financial crunch due to the grounding of more than half of its fleet amid P&W engine supply woes. As a result, Go First has cancelled flights for three days starting May 3, and has filed for voluntary insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC).
According to the Travel Agents Association of India (TAAI) President, Jyoti Mayal, these developments are bad for the airline industry, as they will reduce capacity and could push airfares in certain routes. She pointed out that the industry is already fragile, having lost crores of rupees in Kingfisher Airlines and Jet Airways, and that another airline going into insolvency proceedings is not good news.
Mayal also noted that there is currently a demand for air travel, as it is holiday time, and that fares are likely to go up in sectors where Go First was flying. However, she also highlighted the challenges that the industry will face regarding refunds for booked tickets, as the rules are different if a company goes into insolvency.
The TAAI has around 2,800 members, and Go First was scheduled to operate 1,538 flights per week in the summer schedule. The airline’s financial troubles are a reminder of the difficulties that the industry is facing as a result of the pandemic, and the need for support from governments and other stakeholders.