Sunday, July 14, 2024

EaseMyTrip Co-founder Nishant Pitti Withdraws from GoAir Bid

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Nishant Pitti, co-founder and CEO of EaseMyTrip, has announced his decision to withdraw from the bid to acquire GoAir, which is now rebranded as Go First. “After careful consideration, I have decided to withdraw from the GoAir bid in my personal capacity. This decision allows me to better focus on other strategic priorities and initiatives that align with our long-term vision and growth objectives,” Pitti stated. He emphasized that EaseMyTrip remains committed to delivering exceptional value and service despite this shift in focus.

Key Players and Bid Composition

The acquisition bid for GoAir had two main contenders. A joint bid of approximately Rs 1,600 crore was submitted by Ajay Singh, chairman of SpiceJet, and Busy Bee Airways, a venture associated with Pitti. Another significant bid came from Jaideep Mirchandani’s Sky One Airways. Busy Bee Aviation Pvt Ltd, a joint venture between Pitti and Singh, marked a significant personal investment by the EaseMyTrip CEO.

Impact on EaseMyTrip Performance

Pitti’s withdrawal from the GoAir bid coincides with EaseMyTrip reporting a net loss of Rs 15 crore for the January-March 2024 quarter. This contrasts sharply with the Rs 31 crore profit reported in the same period the previous year. Pitti attributed the loss to the write-off of amounts owed by Go First. Specifically, Rs 54 crore net of taxes was written off due to the airline’s financial instability and pending dispute resolution at the National Company Law Tribunal (NCLT) in Delhi.

Go First future remains uncertain amid financial troubles.

Current Status of Go First

Go First, owned by the Wadia Group, filed for voluntary insolvency in May last year. The airline blamed its financial troubles on engine failures supplied by Pratt & Whitney, leading to a significant number of grounded aircraft. This crisis worsened, resulting in the de-registration of 54 aircraft by the Director General of Civil Aviation (DGCA). Go First owes approximately Rs 6,521 crore to lenders, with the largest exposures being Rs 1,987 crore to the Central Bank of India and Rs 1,430 crore to the Bank of Baroda. The airline’s total liabilities are estimated to be around Rs 11,000 crore, including obligations to lessors, vendors, and customers.

With Pitti stepping back, the future of Busy Bee Aviation Pvt Ltd and its stake in Go First remains uncertain. It is unclear whether Ajay Singh will continue to pursue the acquisition independently. The only remaining bid from Sky One Airways now takes the spotlight. The fate of Go First, which is embroiled in a legal battle with Pratt & Whitney at the Singapore Court of Arbitration, remains precarious. The airline has claimed Rs 8,000 crore in compensation from the engine supplier, holding it responsible for its financial distress.

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