Gains from sale-and-lease-back
of aircraft helped GoAir
post a 36 per cent year-on-year increase in net profit during FY 2017. Net profit for fiscal-year 2017 was Rs 205.25 crore as against Rs 150.24 crore in the previous year.
GoAir's growth has been modest in comparison with its peers and the airline added its 20th aircraft last June. In the last financial year, it made a net addition of four Airbus
A320 planes that yielded a 20 per cent increase in operating revenue to Rs 3,309 crore. Meanwhile, the airline added Hyderabad to its network and launched new flights from Kolkata to Jaipur and Ahmedabad.
A five-fold increase in other income resulted in the better numbers. Other income primarily included Rs 215 crore profit from the sale-and-lease-back
A320neo planes which resulted in higher revenues.
As of March-end, GoAir
had a debt of over Rs 2,300 crore including loans and inter-corporate deposits and had incurred Rs 154 crore as the finance cost.
Wadia group-owned GoAir
is not listed in the markets. Its financial result of FY 17 is disclosed in its annual report filed with the ministry of corporate affairs.
did not respond to a query.
“In February we had estimated GoAir's FY 17 profit between $ 18.5-20 million excluding sale-and-lease-back
profit and compensation from (engine manufacturer) Pratt & Whitney.
We are not surprised with the higher profitability given the increase in other income. The other income is also in line with our expectations. The scale of GoAir's operations is significantly increasing and hence indicating both opportunities and risks ahead,” said Kapil Kaul, CEO (South Asia) of aviation consultancy, CAPA.
Currently, the airline's network spans 23 cities and the airline's strategy has been to grow frequencies in existing routes. Two weeks ago it announced the induction of four additional A320neo.
The airline is yet to finalise its international network, though initial plans are to link Maldives and Phuket to Mumbai. The airline's fleet induction plans were hit due to issues surrounding A320Neo engines and that also resulted in postponing of the international foray. Sources said that the recent induction of A320neo planes both by GoAir
suggests a resolution of engine issues and the same would result in normal aircraft deliveries.
“The induction of four new aircraft will cater to the enhanced seasonal demand whilst offering flexibility to customers with more flight options to choose from. It is our constant endeavour to provide more flexibility of choice for our customers and offer them seamless connectivity, hassle-free and affordable flying experience,” airline's managing director Jeh Wadia said in a statement while announcing new flights.
Chart gives comparison of other airlines' profit/loss