BackGo First may lose slots if suspension continues
The Wadia Group-backed airline has voluntarily filed for insolvency at the National Court of Law Tribunal; however, its petition is yet to be admitted.
PremiumNEW DELHI : Low-fare airline Go First may lose valuable airport slots to other airlines if its operations remain suspended, two people aware of the matter said. Given the intense demand for airport slots, authorities and stakeholders may be forced to allocate them to other airlines ready to operate a route, first on an ad-hoc basis and later permanently if Go First remains grounded, one of the two people cited above said.
A slot is a specific period of 5-20 minutes during which an aircraft can take off or land. Slot timing can impact airline yield, revenue, efficiency and profitability. Given the high demand for early morning and late evening flights, slots at these times generate better yields for airlines.
“High demand during the upcoming peak summer travel season is another factor which is set to accelerate the process of other airlines getting additional aircraft to deploy capacity on routes which have seen a significant dip in the number of flights leading to skyrocketing airfares amid strong travel sentiment," the second person added.
Data from the travel website Ixigo showed last-minute fares on the Delhi-Leh route now cost over ₹29,000, nearly five times the cost of spot bookings a week back at around ₹6,000. Similarly, Delhi-Srinagar flights are now approximately three times more expensive, costing nearly ₹27,000 compared to ₹9,000 a week earlier. Spot airfares for flights on routes where Go First operated, such as Mumbai-Goa, have more than doubled to around ₹10,000 from nearly ₹4,000 a week ago. Those for Delhi-Pune have risen to around ₹9,000-10,000 from over ₹6,000 a week earlier.
The Wadia Group-backed airline has voluntarily filed for insolvency at the National Court of Law Tribunal; however, its petition is yet to be admitted. The court reserved its order after an hours-long hearing on 2 May. “The Go First counsel sought an interim moratorium from the NCLT bench in the hope that this would freeze their assets in the current form, such as slots and aircraft. However, one should not forget that the civil aviation ministry and DGCA clarified during Jet Airways NCLT proceedings that slots were never an asset or property of Jet Airways and hence, were not to be subjected to a moratorium," a lawyer said.“If the ministry reserves the same opinion as before, and Go First continues to suspend flights over 1-2 months, these slots will have to be adjusted in view of passenger inconvenience," he added.
After 25 years of service, full-service carrier Jet Airways stopped flying in April 2019, facing severe financial issues. A slot allocation committee under the civil aviation ministry comprising officials from DGCA, the Airports Authority of India and private airport operators then temporarily redistributed its slots to other airlines as per their plans on aircraft induction and crew availability. Priority was given to those airlines that were adding capacity or aircraft, serving virgin and underserved routes, or withdrawing aircraft from adequately served routes.
The proposed date of operations commencement was also considered before allotting slots. The ad hoc transfer was for an interim period with a 30-day notice period for withdrawal.
“In the case of Go First, it comes down to how soon the airline can restart flights. If the airline can resume flights in a few weeks, it has slots in place. But, if it does not have aircraft to resume flights or the suspension continues further, slots will have to be allocated for the interim as it is a scarce commodity," a third official said.
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