GoAir to lease new A320 aircraft to expand fleet

Written by Roudra Bhattacharya | Rhik Kundu | Mumbai | Updated: Jan 22 2014, 17:19pm hrs
GoAirWe are looking to add several smaller cities to our schedule during 2014-15: GoAir (AP)
GoAir plans to lease new A320 aircraft to expand fleet size as it gears up to meet the demand from tier-2 and 3 cities and also start flying on international routes, CEO Giorgio De Roni, told FE.

The aircraft leasing strategy is aimed at maintaining the pace of growth between 2014 and 2016 during this time, GoAir is not expected to take delivery of any new aircraft. The Mumbai-based airline will add 3 new A320s to its fleet of 17 by end-2014, before taking deliveries for a fresh batch of 72 more A320 Neos starting 2016.

We are analysing opportunity to add some more aircraft as we want to have a young fleet which saves us money in terms of fuel consumption and maintenance costs, De Roni said.

The Italian CEO of the airline however didn't reveal the number of planes the airline plans to lease in the coming year. We have recorded 100% growth in our tier 2 operations in places like Patna, Lucknow, Jaipur, Kochi, Chandigarh, and Jammu and Kashmir, while our metro to metro business has not witnessed a similar pace of growth, De Roni said.

We are looking to add several smaller cities to our schedule during 2014-15. The list of cities to be added hasn't however been finalised yet but we see huge opportunities in East India, he added.

The airline, which has about 9% market share, has witnessed a growth of 25% in passenger traffic as of November 2013, as compared to the same period of the previous year. The airline expects its passenger capacity to improve by a further 20% after three more planes are inducted into its by July 2014. The eighteenth Airbus A320 is set to be inducted into GoAir fleet by the end of February, while the 19th and 20th aircraft will be inducted into the fleet by April and July, respectively.

De Roni is also confident of posting a profit for 2013-14; the carrier recorded a profit of R104.34 crore in FY13 against a R133.72 crore loss in the previous year, on the back of changes in accounting policies with respect to aircraft lease rentals.

We recorded our best-ever first quarter profit this financial year. Though the quarter three, the festival season was not that good, we are still hoping to deliver a profit this financial year, he added. De Roni however didn't share the profit figures, citing that the airline is privately held.

According to Center for Aviation (CAPA) estimates, GoAir reported profit in the range of $17-19 million Q1, FY14, a record quarterly result for the carrier. This was partly supported by sale and leaseback income and other non operating transactions, however it is also reflective of the fact that GoAir achie-ved perhaps the highest average fare of all carriers during this period, a CAPA report said.

GoAir is also confident that the airline will continue to grow even after the arrival of low-cost major Air Asia India into the domestic market and Tata-Singapore Airline joint venture, which are set to hit the Indian sky sometime in 2014.

Chinese commercial airlines have about 1,500 aircraft while their Indian counterparts have just 450 aircraft though the population of both nations are more or less the same. So, there is definitely space for more airlines in the country and scope for growth for its airlines, De Roni added.

However, he confirmed that the airline is currently working on its plans to fly international without elaborating the exact time frame of the launch of its international services. We are analysing market opportunities, and we will take a decision after traffic rights are available,while also taking into account the competitive scenario, he said. The airline had said last year it is looking to fly international by 2014 end. It will deploy 10-12% of its capacity on international routes.