We are on a growth path, stake sale news is not true

Written by Shaheen Mansuri | Updated: Sep 4 2010, 04:50am hrs
Wadia-Group promoted budget carrier GoAir has come a long way from the lows it hit in the second half of FY09. At one point, the airline was cancelling nearly 20% of its flights, which began to erode the confidence of fliers. Thats when chairman Nusli Wadia stepped in, and in April 2009, Kaushik Khona, who was then working as vice-president (finance) in the chairmans office, took over as the CEO. In an interaction, Khona tells FE's Shaheen Mansuri the airline's growth plans and its cost-control methods. Excerpts.

What would be your operational strategies for the current fiscal

We aim to reach maximum number of destinations by expanding our network. Controlling costs is crucial and we have managed to contain costs in the past 15 months. Our focus is on all aspects of network planning, pricing, revenue management, aircraft scheduling, distribution, pricing in addition to sales and marketing functions. Currently, we have 7.8 departures per day per aircraft which makes its 14.40 of blocks hours, considered highest in India. We are still evaluating ways to further control costs to enjoy economies of scale. We will breakeven within two years. However, we have been reporting profits before tax on a monthly basis since October 2009.

What are GoAir's plans to maintain market share

Unlike full-service carriers, GoAir is an inherent low-cost airline with cost like that of an LCC. For a full-service carrier, fixed cost does not change whether the airline operates a full-service or low-cost flights. From the current 5.2% market share, we will hopefully reach 7.5% by December in a market where each player is growing in terms of load factors. Also, our business class is becoming popular amongst corporate travellers. Our on-time performance is one of the best in the industry, at over 80%.

How many aircraft will you acquire

We are in talks with Airbus to advance the delivery of 10 planes by a year. GoAir has an all-Airbus fleet comprising nine aircraft. The airline will add one more aircraft in the next month. We had ordered 20 Airbus planes in 2006. The remaining 10 aircraft were originally scheduled to be delivered by April 2014. We are hopeful that the delivery would be advanced by an year. We have announced the addition of four new destinations Patna, Pune, Leh and Lucknow to our domestic network, which signals our intent to focus on mini-metros and tier-II cities. We have recently hired 25 cabin crew staff and 15 sales and marketing professional and are on the lookout for pilots as we are in expanding mode.

The airline completes five years on November 4, thereby becoming eligible to fly international...

Even though we will be eligible, we have no plans to fly international. We see more opportunity in the domestic market. We have not yet exploited our potential in the Indian skies. However, we are seeking to enter code-sharing arrangements with international carriers. For reaching code-sharing agreements, GoAir needs to complete the international operational safety audit which would be completed soon. Code-sharing agreements will allow GoAir to sell tickets on international routes it does not serve. Its also in talks for interline agreements that govern ticketing and baggage transfers.

GoAir wants to offload 26% stake. How true is it

We are not in the market for sale. Our chairman has made it clear last year that the carrier can fund expansion with internal accruals. We are not looking to sell any stake. GoAir is the only airline which is wholly owned by its promoters-the Wadia Group. We are long-term players in the industry. Our market share has grown from 3% last year to 5.6% at present.