For GoAir, the going gets tough

04 Jul 2008

1

New Delhi: For Wadia family-promoted low cost carrier, GoAir, the going is getting so tough it may well become the first victim of the current downturn being faced by the domestic aviation industry. Industry speculation has it that the carrier is so desperately short on cash that it may look for a bailout sooner rather than later.

The Mumbai-based carrier has already slashed operations by half in a bid to cut losses sparked by soaring costs of fuel. It is now operating a little over 700 flights a month, compared with 1,400 just some time back. It is already cutting jobs and has laid off nearly 160 staffers in a week, including seven on Wednesday.

GoAir operates six A320 aircraft, of which four are leased and two owned and employs around 1,000 people across the country.

According to sources, the airline is so starved for cash that it is selling Mumbai-Delhi tickets for around Rs795 (plus taxes of Rs3,325) compared with Rs2,000 (plus tax) that other operators charge for the sector. It operates the maximum number of flights on this sector, which is the country's busiest route.

GoAir's troubles are in line with other airlines domestically as well as across the world. The domestic aviation industry is expected to register an accumulated loss of over $2 billion in the current financial year.

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