Airfares may go up as Go First goes off air, files for insolvency

NEW DELHI: No-frills carrier Go First filing for insolvency proceedings and cancelling flights is bad for the airline industry as the move will reduce capacity and could push airfares in certain routes, travel agents' grouping TAAI said on Wednesday.

Bogged down by an acute financial crunch due to grounding of more than half of its fleet amid P&W engine supply woes, Go First has cancelled flights for three days starting May 3.

Besides, the Wadia group-owned airline has filed for voluntary insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC).

“It is bad for the (airlines) industry... It is such a fragile industry... we lost crores of rupees in Kingfisher Airlines, in Jet Airways and we have another one going into insolvency (proceedings)," Travel Agents Association of India (TAAI) president Jyoti Mayal said.

The developments at Go First, which has been flying for more than 17 years, also come at a time when the domestic air traffic is on an upward trajectory.

Ms Mayal said that right now there is demand for air travel as it is holiday time and "we do expect fares going up in sectors it (Go First) was flying. In the coming weeks, fares are likely to go up."

Regarding booked tickets, she said it is the company that has to provide refunds and if it goes into insolvency, the rules are different. “Those are the challenges we are going to be facing”.

According to Go First website, it was operating flights to 27 domestic and 8 international destinations, including Abu Dhabi, Bangkok, Phuket, Kuwait and Dubai.

On the domestic routes, it was connecting Srinagar, Port Blair, Varanasi, Bengaluru, Delhi, Jammu, Mumbai, Kochi and Kolkata, among other places.

At some airports, frustrated Go First passengers were seen complaining about flight cancellations and left with no option but to just seek full refund.

A passenger at Mumbai airport said he got a message about the flight cancellation on Tuesday night but the airline has not given any option for rescheduling the travel and that he has to now pay a huge amount for a ticket.

Mohammed Aman Sheikh, who had booked a Go First flight from Mumbai to Chennai, was wondering what to do next as he had to attend wedding of his elder brother in Chennai.

At Mumbai airport, another passenger Rakesh was to travel to Lucknow and with the Go First flight cancelled, he was planning to go by train.

In a statement, TAAI expressed concern over the sudden cancellation of flights by Go First. “The cancellations and refunds of tickets to its members and consumers have raised concerns at TAAI, who fear that travel agents will be adversely affected, presenting a significant financial blow as they struggle to revive post Covid," it said.

TAAI also said it has been asking for measures to address airline defaults. “The association has been advocating for protection through insurance on tickets or placing monies in an escrow account with the government as protection for the entire ecosystem,” it said, adding that the government needs to bring policies to safeguard consumer's and service provider's money.

In the summer schedule that is on from March 26 to October 28, Go First is to operate 1,538 flights per week.