Go First must show us it can sustain ops: Thomas Cook

Low-cost carrier Go First, which is yet to resume flight operations after filing for voluntary insolvency, will need to convincingly win back the trust of passengers and travel companies before making plans for a successful revival, Madhavan Menon, chairman & managing director, Thomas Cook (India) Ltd told Mint.

“My customers’ interest is primary. Till Go Air can convince us that they will operate in a sustained manner I don’t see demand for their seats coming back,” Menon said.

“They suddenly stopped operations one day, they left passengers of mine and everybody else stranded. They have to give both the passengers and the industry the confidence that they can fly again. They have extended period for flight cancellation six times. Unless I have confidence, I will not give it to my customer. At the end of the day my reputation lies with my customer, not Go Air’s,” he added.

Go First’s closure has impacted various bookings made by Thomas Cook, which has led to this stance by the travel service provider. “My customers who were booked on Go Air earlier are now witnessing higher air fares and every time they go to book, the seats are disappearing,” he said.

The Thomas Cook India Group, an omnichannel travel company, is present in 28 countries worldwide and naturally had exposure to the Wadia Group-backed airline when it suddenly suspended flights operations from 3 May. While the company will stand in the line of creditors to which Go Air owes dues, it has made provisions for the dues in the interim and does not see any major disruption to the cash flows as a result of the same.

Meanwhile, the airline has informed its pilots that it plans to resume some flight operations from 27 May but a plan is yet to be submitted to civil aviation regulator Directorate General of Civil Aviation on the same.

Thomas Cook India Group, on Thursday, reported operating earnings before interest, tax, depreciation and amortisation at ₹2.7 billion in 2022-23 as compared to a loss of ₹1.2 billion in 2021-22. The profit before tax for the group stood at ₹560 million in 2022-23, while it had reported a loss of ₹1.14 billion in 2021-22.

The group attributes the increase in revenues to record demand. “This is the change in consumer behaviour and it is here to stay for some time, people are saying okay doesn’t matter what it costs, let me go on holiday,” he added.

The group derives revenues and profits from largely four segments including foreign exchange, Sterling Holidays, travel services including meetings, conferences incentives, and leisure travel, and digital imaging solutions. Thomas Cook has a 72.34% shareholding of Fairbridge Capital, a subsidiary of Fairfax, which is the promoter group for Bengaluru airport.

The group expects numbers for the existing fiscal to be better than last year on the back of high demand. “I have got a very strong forward booking book for the next quarter... Q1, Q2, Q3 demand is going to be continuous. Despite high air fares, hotel rates there is sufficient demand across all segments.

The group is also hopeful of strong business from government projects including G20, Khelo India among others.

“We expect to book record sales this year. This is driven by a lot more government business coming our way, we are one of the three logistics partners for G20 meetings, 70-80 of the 130 meetings, that is going to add over 100 crore to our turnover, Khelo India in Uttar Pradesh, Goa...our expectation is we will see record business in incentive business,” he said.

Overall, the group expects better results in 2023-24 as compared to 2022-23 on the back of forex, corporate businesses including incentive and corporate travel, and leisure.