An Analysis of Go First Airlines: A Case Study on Voluntary Insolvency Resolution in the Aviation Industry

Abstract

The aviation sector plays a vital role in the worldwide economy, enabling the exchange of goods, promoting tourism, and fostering international connections. Nevertheless, in recent years, this industry has faced a multitude of obstacles that have placed significant strain on airlines. The combination of economic recessions, unpredictable fuel costs, and the severe consequences of the COVID-19 epidemic has resulted in a climate characterised by instability and a lack of predictability. Consequently, numerous airlines, both well-established companies and new entrants, have been facing financial difficulties and striving to stay in operation.

In the midst of a difficult situation, this case study examines the deliberate process of resolving insolvency that Go First Airlines, a major low-cost carrier in India, undertook. The airline's choice to engage in this procedure despite financial difficulties and operational obstacles provides important understanding into the workings of the aviation sector and the potential routes for recovery and reorganisation. The study seeks to elucidate the issues airlines encounter and the strategies they might employ to overcome these hurdles by analysing the factors contributing to Go First's insolvency settlement.

Go First Airlines, established in 2005, quickly became a prominent participant in India's growing aviation industry. The airline established a specialised market for itself by providing cost-effective air transport to a rapidly expanding middle-class demographic. Notwithstanding this achievement, the corporation saw increasing financial burdens as the industry environment changed. The company's resources were severely strained due to the combination of economic challenges and the worldwide pandemic. As a result, Go First made the decision to voluntarily initiate insolvency resolution procedures in order to deal with its financial difficulties and find a way to become financially stable in the long run.

This case study aims to conduct a thorough examination of the circumstances that contributed to the financial difficulties faced by Go First Airlines, the process of resolving its insolvency, and the potential consequences for the aviation sector as a whole. This analysis will examine the relationship between financial management, operational difficulties, and industry trends that have caused the airline's difficulties. In addition, the case study will analyse the influence of regulatory frameworks and government policies on the industry's structure and the potential for its revival. In essence, the primary objective of this research is to provide airlines with vital insights to help them navigate the intricate and swiftly evolving realm of aviation.