United Technologies Finance has agreed to fund Wadia-owned GoAir for making pre-delivery payment for its 72 A-320 NEO aircraft worth Rs 32,400 crore.
United Technologies Finance is part of the US-based United Technologies which makes Pratt & Whitney engines.
GoAir (India) Chief Executive Officer, Giorgio de Roni, told
An industry analyst said though airlines use various channels to raise funds for buying aircraft, GoAir’s model is not commonly used.
de Roni said the airline could go in for an IPO but it would entirely depend on when the Government allows FDI in the airline sector. “We are open to opportunities. The Wadia family is strongly committed to the airline venture. But they want to keep the majority (equity) with them all the time. My understanding is that we will evaluate all reasonable proposals along with shareholders,” he said. He said certain airlines have evinced interest in picking up a stake in GoAir, but the airline will not evaluate the proposal until the FDI is allowed in the sector.
de Roni, who worked with Italian airline, Air One, as its Chief Revenue Officer before taking over his new assignment with GoAir, said high taxes on fuel as well as airport services makes it unviable for any airline in India to adopt the low cost model. “I prefer labelling GoAir as a budget carrier. We are not low cost. Unfortunately in India, there is no chance to be low cost. We would like to be one, in fact.”
The GoAir CEO said even though the airline is still considered a small player in the sector, it would rather be profitable than chase market share. The airline expects to make profits this fiscal. Last year, it posted losses because of currency fluctuations as well as high fuel cost.