RIGHT FROM THE WORD 'GO'
Cruising Heights|June - July 2021
GoAir, one of the oldest carriers in the country, is planning to go Ultra Low Cost even as it inches forward to an IPO. Will it succeed in its plans? AMEYA JOSHI lists out the challenges the carrier will face.
AMEYA JOSHI

READY, STEADY, GO...: Now that GoAir has rebranded itself to Go First and put its house in order, will it be able to get more market share that has stagnated for years and has not moved beyond 10 per cent?

The Wadia group-owned and Mumbaiheadquartered low-cost carrier GoAir filed for Draft Red Herring Prospectus (DRHP) in May. This is the farthest the airline has moved in its plan to list over the last many years. All its plans in the past were abandoned midway due to one reason or another and many times due to no fault of the airline as market conditions deteriorated quickly.

For an airline which was written offby many – it has not only stood the test of time but has emerged stronger after every crisis! As it moves towards an IPO, it could emerge as a larger and major player who could claim a number two slot in Indian aviation. The airline commenced operations in 2005 and has just over 50 aircraft in its fleet, even as rival IndiGo which started a year later is over five times in size.

History

The airline started operations in November 2005. Within years, the industry was hit by the crisis in 2008 when fuel prices surged and the global economy came crashing. A small airline back then, GoAir did a successful turnaround and placed an order for 72 A320neo aircraft in 2011. This was topped up with another 72 aircraft later.

While many airlines were grounded during these times, GoAir has remained small enough to continue operations. The airline is often criticised for having a revolving top management. Recently, the airline appointed Kaushik Khona as its CEO. Khona was the CEO of the airline and had led the turnaround in 2008-9. He was replaced by Giorgio De Roni who had to leave due to personal health reasons. Since then, the airline has not had a stable top management with many having made a stop in GoAir including Vinay Dube who earlier led Jet Airways, Miranda Mills, Tim Jordan, Praveen Iyer, C Vrieswijk, Wolfgang Prock-Schauer amongst others.

Surviving the lockdown

The airline was all set for its next phase of growth — having started international services and plans to induct a new aircraft a month — until the pandemic struck. The airline is again planning to file for an IPO and list on the bourses to raise cash which is likely to be used to retire old debt, get immediate cash infusion to tide over the current crisis and plan its expansion.

Like all airlines in the country, GoAir has been impacted by the pandemic. While IndiGo, India’s largest airline, has time and again said that it has not defaulted on lease payments, GoAir has listed out that they continue to be in payment default under several of their aircraft lease agreements. This could lead to legal action against the company.

WADIA BATTLES

It’s straight out of Ripley’s Believe it or not. No one knows why the father and son are battling for the logo and trademark or is it really a case of noora kushti (shadow boxing). But now that the rebranding has taken place with the airline now called Go First how does it help:

  • Go Airlines (India) Ltd (GoAir) is exploring legal options against Go Holdings and one of its promoters and former Managing Director Jeh Wadia to establish its ownership over all the trademarks and domain names used by the company. The airline mentioned this under “risk factors” in the draft red herring prospectus (DRHP) filed with the stock market regulator recently.
  • Jeh, younger son of Wadia group patriarch Nusli Wadia, has been at the helm of affairs at GoAir since its inception in 2005 and stepped down as its managing director in March. Go Holdings, in which Jeh owns a 99 per cent stake, owns the brand ‘GoAir’ and certain other related trademarks of the airline.
  • In March this year, Go Holdings made two applications to the Registrar of Trade Marks for the registration of two word marks used exclusively by the company, namely “Go Airlines” and “www.goair.in”.
  • “Our company is opposing the aforesaid applications and have also applied for the registration of these two-word marks in our own name. The company also intends to take necessary steps and pursue legal options to establish its ownership over all the trademarks and domain names,” Go Air said, adding that there was no assurance that the claims would be settled in its favour.
  • However, sources close to Go Air said the issue was irrelevant now as the airline had announced an image makeover and a new name — Go First, positioned as an ultralow cost airline. This was done just a day before filing the DRHP.

Rebranding

The airline has also embarked upon a rebranding exercise where GoAir will be rebranded as GO First. The airline sent out one-pager advertisements in newspapers on the morning of May 13, 2021. The logo on the tail changed in look and colour and there was a promise of cheaper fares, a young fleet and safe operations: three things which the airline has already offered!

The rebranding has not brought about immediate, visible changes on the ground, or its website, unlike some other cases like Vodafone’s acquisition of Hutch, when everything changed overnight.

In its initial days, GoAir had a different coloured aircraft - this included the tail, fuselage and engine cowlings. As it became difficult to maintain such an inventory and spares along with increasing costs - the airline shifted to just a handful of colours i.e. gray and blue and later moved to just Blue. This was done nearly ten years ago.

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