India’s Go First plans IPO in July as air travel rebounds

GO First, India’s No 2 airline, is planning to raise 36 billion rupees (S$641.3 million) through an initial public offering (IPO) in July as air travel recovers from the pandemic, according to a person familiar with the matter.

Go First’s share sale comes as air travel is rebounding in the South Asian nation, driven by pent-up demand as people emerge from one of the world’s worst coronavirus outbreaks. India, the world’s fastest-growing major aviation market before the pandemic, expects local traffic to exceed pre-pandemic levels of 415,000 daily fliers within a year. Indian airlines are also adding capacity to capture a revival as international flights resume.

The IPO will be crucial for debt-laden Go First, which is losing money and is planning to rely on proceeds from the share sale to repay debt and dues to creditors including Indian Oil Corp. Go First, previously known as GoAir, had obligations of about 81.6 billion rupees as at April last year, according to its draft preliminary prospectus.

Go First, which ranks second after Indigo, expects to lose the No 2 spot when Tata Sons merges its airlines — Vistara, Air India and AirAsia India — the source said. Go First is expecting to turn profitable this quarter, boosted by a surge in demand for leisure travel, the source added.

To capture the travel rebound, Go First will begin adding 10 new Airbus SE 320neo aircraft starting August, bringing its total fleet count to 62 by March 2023, the source said. The airline has 144 320neo jets on order. Go First will use the new aircraft to increase flight frequency on routes to Abu Dhabi and Kuwait, and to add more destinations in South-east Asia such as Vietnam, Indonesia and Cambodia. BLOOMBERG