GoAir to strengthen its presence in the regional markets: Giorgio De Roni

Interview with CEO, GoAir

It is the smallest of all domestic airlines, with 13 planes and a market share of around seven per cent. But over the last few months, the Wadia-group owned GoAir is expanding its network by introducing new flights and looking at growth in its business class products. Giorgio De Roni, the airline's Italian chief executive officer, tells ANEESH PHADNIS the growth plans in an email interview. Excerpts:

Can you share details with respect to growth in passengers, revenue, yields ?
In the first nine months of this financial year, GoAir has approximately grown by 15 per cent in term of passengers. Above average growth rate has been recorded in many non-metro airports, and particularly in Jammu and Kashmir. 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 characterised by extremely high costs. Tax on aviation turbine fuel, at an average of 24 per cent, 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. What are the growth plans 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. 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 utilisation 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 percent loads last year and 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...
The GoBusiness product is witnessing a higher growth and we are 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 and our price proposition, normally less than 50 per cent of our competitors’.

GoClub is a web-based program devised to attract more and more passengers to our website through added values and discounts based on loyalty. Although we have only recently started the program, we have so far recorded approximately 100,000 members.

What is the status on GoAir's request for change in norms for Indian airlines to launch services abroad?
We have recently applied for the authorisation to fly internationally and we are confidently awaiting a reply from 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.