Business Standard: July 13, 2016
Mumbai: GoAir has signed for an additional 72 Airbus A320neo aircraft, doubling its order and paving the way for future expansion.
GoAir on Tuesday signed a memorandum of understanding with Airbus for the planes, valued at $7.7 billion at the current list price. The two sides are yet to sign a purchase contract.
The deal announcement comes ahead of an Initial Public Offering of equity by the Wadia group-owned airline, which has a share of eight per cent in the country’s domestic market. According to reports, the airline would be able to raise as much as Rs 1,000 crore from sale of shares.
GoAir, which had ordered 72 Airbus A320neo planes in 2011, is now one of the three airlines that operate the new-generation aircraft that would cut down on fuel consumption. GoAir has received two A320Neo planes till now and the rest of the 2011 order will be delivered till 2020.
“The new A320neo will give us the competitive edge to achieve our growth targets and help us strengthen our presence in the wider region,” said chief executive Wolfgang Prock-Schauer.
GoAir has been among the smallest airlines in India taking a cautious approach in expansion. While its peers IndiGo and SpiceJet embarked on fleet and network expansion, GoAir added only 20 planes in a decade. But, the airline has remained profitable and industry consultancy Centre for Asia Pacific Aviation estimates GoAir to have posted a profit of $20 million in FY16.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.