EaseMyTrip co-founder Nishant Pitti withdraws from GoAir Bid

Nishant Pitti, co-founder and CEO of EaseMyTrip, announced his withdrawal from the GoAir acquisition process.

"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 said.

"Our commitment to delivering exceptional value and service remains unwavering as we continue to navigate new opportunities and challenges," Pitti added.

Bid's composition and key players

The acquisition bid for GoAir now rebranded as Go First, saw two primary contenders.

A joint bid of approximately Rs 1,600 crore was submitted by SpiceJet's chairman Ajay Singh and Busy Bee Airways, associated with Pitti.

The other significant bid came from Jaideep Mirchandani's Sky One Airways. Busy Bee Aviation Pvt Ltd, a joint venture between Pitti and Singh, led this effort, marking a significant personal investment by the EaseMyTrip CEO.

Affect on EaseMyTrip's financial performance

The withdrawal coincides with EaseMyTrip reporting a net loss of Rs 15 crore for the January-March 2024 quarter, a sharp contrast to the Rs 31 crore profit in the same period the previous year. Pitti attributed this 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), Delhi Bench.

Current status of Go First?

Go First, owned by the Wadia Group, filed for voluntary insolvency in May last year. The airline attributed its financial troubles to engine failures supplied by Pratt & Whitney, which led to a significant number of grounded aircraft.

The crisis deepened, leading to 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 stands in focus. The fate of Go First, embroiled in a legal battle with Pratt & Whitney at the Singapore Court of Arbitration, remains precarious.

Notably, The airline has claimed Rs 8,000 crore in compensation from the engine supplier, holding it responsible for its financial distress.