GoAir's fleet expansion to meet rising competition, say aviation experts

GoAir's order for additional 72 Airbus A320neo planes signifies the airline's confidence in India's aviation growth and its intent to remain relevant in the crowded domestic skies, say sector experts.

On Tuesday, GoAir signed up for 72 A320neo, doubling its order to 144 planes. All the planes will be delivered between 2016 and 2025.

Over the last ten years, GoAir has followed a cautious approach of not chasing market share through rapid expansion or acquisition. In the last ten years, it grew its fleet size to 20 aircraft, inducting on an average two aircraft a year. Its small size also ensured that it did not burn cash the way some of its peers did and allowed it to remain profitable.

Tuesday's order announcement demonstrates its long-term commitment for growth.

“Effectively, GoAir has a fleet strategy for the next ten years. It signifies management confidence in India's aviation growth. In the face of existing and new competition, GoAir has to scale up and the order reflects the airline's growth intent,” said Devesh Agarwal, editor of aviation blog Bangalore Aviation.

“Go Air has chosen profitability over market share and has been successful so far. However, with IndiGo's declared fleet plans and SpiceJet's anticipated order, there is no option but to grow. Airbus has strong order book for A320neo aircraft. I feel this is the right time for GoAir to lock in the asset prices for future growth,” said aviation consultant Anurag Jain.