Don’t miss the latest developments in business and finance.

GoAir to strengthen presence in regional markets: CEO

Giorgio De Roni claims in a Q&A, that the carrier has achieved above-average growth in non-metro airports

Aneesh Phadnis Mumbai
Last Updated : Feb 16 2013 | 7:26 PM IST
It is the smallest of all domestic airlines with thirteen planes and a market share of around 7%. But over the last few months the Wadia-group owned airline is expanding its network introducing new flights and looking at growth in its business class products. Giorgio De Roni, the airline's Italian chief executive officer shares with Business Standard Go Air's growth plans in an email interview. Excerpts:

Can you share details with respect to growth in passengers, revenue, yields ?

In the first 9 months of this financial year GoAir has approximately grown by 15% in term of passengers. Growth rate above average has been recorded in many non-metro airports, and particularly in J&K. We are not a listed company and as per company policy we do not disclose financial data.

What initiatives were undertaken on the cost front?

Airlines in India operate in a very challenging environment characterized by extremely high costs.  Tax on aviation turbine fuel  at an average of 24%, is at the second highest level in the world, after Bangladesh. Airport and navigation charges are continuously increasing at rates significantly higher than the inflation rate. The consequence is that airlines, purely to survive, have been obliged to transfer a significant increase in cost year-on-year to the passenger with an increase in fares. It is therefore vital for any airline to make all efforts towards efficiency. For GoAir this has been translated in significant investment in our fleet which is the youngest in India, with lower fuel consumption, more efficient and cost-effective maintenance processes and very high aircraft utilisation.

GoAir has been cautious in expansion and only recently has it began adding flights from Kolkata. It does not serve Hyderabad. What are the growth plans in this year and what capacity addition  will GoAir make? Any plans to start red eye (post midnight) flights ?

Within the end of the next financial year GoAir will receive five brand new additional aircraft. We are planning to strengthen our presence in some regional, fast growing markets where our services. Although we are evaluating the opportunity to further increase the number of airports we presently serve (21), most of the additional capacity will be deployed in new direct flights between airports presently served through intermediate stops.  Aircraft utilization is around 13 hours per day per aircraft. The present environment, with very high cost of fuel and navigation, do not recommend the deployment of red eye flights, since in order to attract passengers on these flights airlines should charge very aggressive fares which are not possible and consistent with the high cost environment

GoAir reported 75% loads last year the business class product did not get good loads. What is the reason for muted response? Also GoClub, the airline's loyalty programme has not taken off and there does not seem any big marketing campaign for it either.

GoBusiness product is definitely witnessing a higher growth and we are now planning further added values to exceed our customers’ expectations. The target of our business class is the price conscious business traveller who appreciates the comfort we offer on board and our price proposition that is normally less than 50% than our competitors’.  

GoClub is a web based program devised to attract more and more passengers to our web site through added values and discounts based on loyalty. Although we have only recently started the program we have so far recorded approximately one lakh members.

What is the status on GoAir's request for change in norms for Indian airlines to launch services abroad. What view has govt taken?

We have recently applied for the authorisation to fly internationally and we are confidently awaiting a reply for the Ministry of Civil Aviation. Indian airlines with less than 20 aircraft are not allowed presently to fly international, whereas foreign carriers even with less than five years in operation and a very limited number of aircraft can fly to India.

More From This Section

First Published: Feb 16 2013 | 4:34 PM IST

Next Story