22.12.08

GoAir to expand fleet size

Wadia Group’s no-frills airline GoAir is expanding its operations and increasing fleet. The airline has decided to scale up its fleet size to 35 by March 2011 from the existing six in two tranches. It will add 20 aircraft by this year and later bring in another nine in the next two years. The proposed expansion coupled with the tumbling crude and ATF prices will help the business break-even faster. Industry experts say that the company incurred “substantial loss” last year. In fact, the domestic aviation sector has been bleeding. It lost nearly Rs 4,000 crore during 2007-08, and the accumulated loss is expected to double in the current fiscal. The company source said GoAir is looking at an alliance with foreign carriers to expand services and increase its market share to more than 10% from the existing 2.3%. “The alliance would be for code sharing with Middle-East and Europe-based carriers,” a company executive added. The country’s smallest carrier has increased the number of flights to over 900 in the winter season and operates across 11 destinations. India will need 1,001 new aircraft worth $105 billion in the next two decades, as demand for air travel in Asia’s fourth-biggest economy will grow in the coming years. According to Boeing estimates, air travel may grow at an average of 8% over the next 20 years, fastest in the world and more than twice the global average. A KPMG report says that India’s air traffic may rise to as many as 313 million people by 2012 from the present level of 100 million. Analysts said that ATF accounts for nearly 45% of the operational costs of airlines and substantial drop in jet fuel prices will help domestic carriers to be in black. Since September, crude prices have tumbled from $147 a barrel to $33 a barrel and ATF prices fell by 50%.

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