GoAir lines up $400 m fleet spread

Low-cost carrier GoAir is eyeing breakeven next fiscal and has drawn up a $400 million aircraft acquisition plan to expand the current fleet of A320s.

The airline, which has reportedly been in dire financial straits for some time now, may well be looking for either a strategic investor or infusion of funds through the private equity route. It is in talks with banks and other lenders to fund the aircraft acquisition plan.

Asked about reports of SpiceJet being interested in picking up stake/merging the two carriers, Edgardo Badiali, the chief executive officer of GoAir, said “We are not looking at any kind of consolidation or merger with SpiceJet or any other airline, at least not to my knowledge. It’s one of the many rumours going around.”

Though Badiali acknowledged that a strategic investor was an “opportunity” he asserted that a decision (on roping in a strategic investor) would be taken by the “promoters and the shareholders” of GoAir and no such move was afoot at present. GoAir operates four A320 aircraft but by June, its fleet size would double to eight.

Another two aircraft would be arriving by the end of the year and in all, the carrier would have a fleet size of 20 by 2012. Fleet expansion has led to GoAir adding cities to its map and this summer, the airline would become the first LCC to connect Chandigarh with Delhi and Mumbai. It would also add cities such as Amritsar and Bangalore to its route map this summer.

Claiming that the airline had deliberately gone slow on expansion in the last many months, Badiali said GoAir’s short-term capacity increase would be about 50%; he claimed that the yield per passenger is already pretty high at Rs 3,002! GoAir is targeting 75% load factor this summer and would be running promotional fares of Rs 0 till month-end.