Go First is raising funds at a time when Covid has severely impacted the financials of all airlines and trying to raise funds. India’s biggest airline (in terms of passengers flown) IndiGo last week decided to raise upto Rs 3,000 crore through “an issue of equity shares by way of a qualified institutions placement.” IndiGo for years has an offer from Qatar Airways chief Akbar Al Baker to invest in it whenever promoter Rahul Bhatia gives his nod for the same.
Vistara owners, Tata Group and Singapore Airlines, have pumped in Rs 465 crore into the full service carrier — the fourth tranche during the pandemic since last April. In all the promoters have together put in Rs 2,000 crore since last April.
Tatas are also infusing funds in their other airline, AirAsia India. Divestment-bound Air India, which is not getting equity infusion from the government, raises fresh sovereign guarantee-backed loans to keep flying till it finds a new owner, which is likely to be the Tata Group. Other airlines are also trying to somehow survive Covid downturn on travel — the biggest crisis aviation has ever faced.
Go First’s draft red herring prospectus details the issues faced by the airline during the pandemic. To be sure, all airlines are passing through the same severe turbulence with only having the safety of deep-pocket promoters (Go Air, Vistara, AirAsia India) or own cash reserves (IndiGo).
In “December 2020, our departures were at approximately 63% of the departures during December 2019… This has led to a sudden and significant decline in our revenues and profitability from late February 2020 and as a result, we recorded a net loss…