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Amid COVID Clouds, Go Airlines Expect Near Term Performance To Be 'Significantly' Different From Past

Go Airlines (India) Ltd said the aviation industry faces significant business challenges as a result of the COVID-19 pandemic's effects and that there has been a 'sudden and significant decline' in revenues and profitability from late February 2020.

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 As it prepares to be a publicly-traded company amid the pandemic gloom looming large over the aviation industry, Go Airlines expects its short-to-medium term future performance to be significantly different from the past performance.

The 15-year-old budget airline, promoted by the Wadia-group, has filed preliminary papers for a Rs 3,600-crore initial share sale and the proceeds will be utilised primarily for repaying debt.

In its Draft Red Herring Prospectus (DRHP), Go Airlines (India) Ltd said the aviation industry faces significant business challenges as a result of the COVID-19 pandemic's effects and that there has been a 'sudden and significant decline' in revenues and profitability from late February 2020.

The airline incurred a net loss of Rs 470.69 crore in the nine months ended December 2020 and has a negative networth of Rs 1,961.50 crore '... due to the letter of support received from our promoters and our measures to improve our operations, our financial statements as of and for the nine months ended December 31, 2020 have been prepared on a going concern basis,' as per the DRHP.

Go Airlines, which has rebranded itself as Go First, noted that several regions in India are seeing a significant increase in COVID-19 cases and entering into further phases of lockdowns or movement restrictions and there remains uncertainty as to the impact of these lockdowns and restrictions.

'There is no assurance as to how long it will take, if at all, for travel to rebound to pre-pandemic levels, especially for international travel.

'While current booking trends and forward revenue levels indicate that the general public's confidence in air travel appears to be increasing, travelling conditions will continue to be challenging and it is expected that our short-to-medium term future performance will be significantly different from our past performance,' it said.

According to the DRHP, the airline was unable to make payments under certain aircraft lease and supply agreements, and agreements with other service providers.

The carrier also raised funding from a Wadia group company to increase liquidity by way of an equity infusion and non-fund-based support.

'We raised Rs 970 million as equity and non-fund-based support of USD 50 million was arranged through our subsidiary, Go Singapore during fiscal 2020.

'In fiscal 2021, we availed of an additional fund-based (including non-fund based sub-limits) line of credit of Rs 5,000.00 million from ICICI Bank Limited. We have been further sanctioned an additional facility of Rs 3,420 million by Deutsche Bank AG, which we have fully availed. We recently raised Rs 5,460 million as equity from Baymanco Investments Limited, a member of our Promoter Group,' the document said. 

(PTI)


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