Go First insolvency spoils summer travel plans of Indians

Go First suspended flights and filed for insolvency on May 2

Indian travellers are facing uncertainty and difficulties in their summer holiday plans due to the recent filing for insolvency and grounding of aircraft by Go First airline.

Many fliers have already been hit by flight cancellations, while several others are scrambling to book on other airlines after getting cancellation messages from the cash-strapped carrier.

Mayuri Shah, a Mumbai resident, had to shell out Rs 8,000 more for booking tickets on another flight for her family of three after receiving a cancellation message from Go First for her scheduled travel to Goa later this month. "My return flight to Mumbai from Goa was cancelled and I struggled to book three tickets and ended up paying a lot more. I have faced delays for my previous travel via Go First but I was looking for cheaper rates so went ahead with it. However, re-booking has cost me more," she said.

Also read: Go First cancels all flights scheduled till May 19, assures full refunds

It is a tough time for holiday goers who had booked entire flights, said Chirag Gupta, Founder & CEO, Deyor, a travel-technology platform. "Apart from flights, a holiday typically includes hotels as well, and hotels are always booked with fixed cancellation policies. Holiday goers are now scrambling to book alternative flights to their destinations, which naturally have gone a lot higher in price due to the current unfortunate situation involving Go First," he added.

Go First, which had a 6.9 percent market share in Q1 2023, filed for insolvency resolution due to the grounding of its aircraft and cash crunch, leaving a vacuum of approximately 1 million airline seats on a monthly basis, noted Nandivardhan Jain, CEO of Noesis, a hospitality consulting and hotel investment advisory.

This has increased airfares as demand moved to other airlines, he said.

"The aviation industry expects record occupancy rates of over 95 percent this summer. However, expensive air tickets may cause passengers to opt for other modes of travel or modify their holiday plans," Jain added.

Also read: NCLT order on insolvency to ensure Go First remains viable, says CEO Kaushik Khona

Another traveller who booked a Go First flight to Goa from Mumbai is in a dilemma whether he should book tickets on another reliable airline or opt for bus travel. While the traveller has not yet received any cancellation message from the airline for his travel in August, the flier said that looking at the current situation he doesn't want to take any chances.

High airfares

This summer, air travel costs for Indian travellers are expected to be double that of the previous years, which is hurting people's overall travel budgets, Jain said.

"The current demand and supply gap in the airline industry is expected to lead to a rise in airfares, which may discourage many from travelling. This trend could have a significant impact on the growth rate of the travel market and can lead to reduced demand for air travel. This could ultimately result in slower growth for the travel industry as a whole," he added.

Prices have gone up for other airlines and holiday goers are now left with no option but to either cancel their plans or book more expensive alternatives, said Gupta. “A typical Delhi-Leh flight which costs around Rs 5,000 is now Rs 8,000 or higher," he added.

Also read: Lessors won't be able to repossess GoFirst aircraft if bankruptcy code kicks in

Air Travel has become expensive by 15-20 percent after the Go First issue started, said Sanjay Dang, Managing Director of Le Travelworld, a travel agency.

Travelling from Nagpur to Dehradun via Delhi, Neha Lal (name changed) had one of the worst experiences recently when her connecting Go First flight from Nagpur got delayed by four hours, making her miss the Delhi to Dehradun flight.

"I had a four-day plan as it was a long weekend but the day I was leaving from Nagpur on April 27 the flight which was scheduled to depart at 11:55 AM got delayed to 14:50 PM and further got delayed to 15:40 PM. I tried booking another flight but there was no flight from other airlines for that route. My one entire day got wasted. The travel platform through which I had booked tickets told me they couldn't do much as it was an operational issue and that there were no other flights they could book for me. I had to reschedule my flight from Delhi to Dehradun which cost me Rs 2,000 extra."

She added: "I had planned a getaway and had taken out time for myself but the trip had such a chaotic start. My four-day plan got squeezed to three days due to Go First's operational issue."

Dang said some of the foreign travel routes including Bangkok are also getting affected due to the Go First flight suspension.

In limbo

However, Jain said that Go First was limited to operating flights to only seven international destinations, including Dubai, Abu Dhabi, Muscat, Phuket, Male, Bangkok and Kuwait. "Due to extreme weather conditions in the Middle East, travel to these destinations is limited during the summer season. So the impact of Go First's exit on Indian travellers looking to travel to foreign destinations this summer is limited."

Also read: Go First insolvency chronology

The Go First issue is likely to have a short-term impact on travel demand in India, added Gupta.

Dang too thinks that the impact of Go First's exit on overall travel may not be significant. "Go First was not really a go-to brand due to a high number of flight cancellations. So, as a company, we are not badly affected. However, fliers who have booked tickets are in a difficult situation. Until they (Go First) resume operations and things become regular, no one can be too sure of how the situation will pan out."

The Travel Agents Association of India (TAAI), which has about 2,500 firms as members, in a representation to Union Civil Aviation Minister Jyotiraditya Scindia said that Rs 900 crore is stuck as they had made forward bookings due to high demand because of summer holidays. The group said Go First flights were booked to 90-93 percent capacity by their members for the holiday season.