Shares of InterGlobe Aviation, the parent of IndiGo, and SpiceJet jumped on Wednesday after Go First sought voluntary insolvency resolution proceedings and decided to cancel flights for three days starting May 3.
Earlier today, InterGlobe Aviation stock rallied 7.99 per cent to Rs 2,235.95 -- its 52-week high, while shares of SpiceJet zoomed 5.58 per cent to Rs 33.25. As of 1 pm, Indigo shares were up aorund 5% while Spicejet was 2.5% higher.
Cash-strapped Go First on Tuesday sought voluntary insolvency resolution proceedings and decided to cancel flights for three days starting May 3, as the budget airline is unable to meet financial obligations amid the grounding of half of its fleet due to non-availability of Pratt & Whitney engines.
Go First, which has been flying for more than 17 years, cancelled all flights for three days -- May 3, 4 and 5 -- and promised to make a full refund to the customers. It operates around 180-185 flights, carrying around 30,000 passengers on a daily basis.
Airline's CEO Kaushik Khona said the airline has grounded 28 planes, more than half of its fleet, due to non-supply of engines by Pratt & Whitney (P&W), and that has resulted in a fund crunch.
The Wadia group-owned carrier has moved the National Company Law Tribunal (NCLT), Delhi, seeking voluntary insolvency resolution proceedings.
Go First is the second major scheduled airline after Jet Airways to seek resolution under insolvency proceedings