Wadia family to sell a stake in GoAir
05 October 2007
The Wadia family is evaluating proposals to sell a stake in Go Airlines (India) Pvt Ltd, which owns low-fare carrier GoAir. "We have not yet made a decision," GoAir managing director Jeh Wadia told the media at a news conference in New Delhi yesterday, without giving any details. However, sources indicated that the family might sell up to 26 per cent, depending on the terms and conditions.
Most Indian low-cost carriers are looking for mergers and alliances (M&As) to reduce costs, after Jet Airways bought Sahara Airlines in April and Kintgfisher Airlines snapped up Air Deccan in May. The two state-owned carriers, Air India and Indian airlines, have also merged.
India''s aviation industry lost Rs2,000 crore ($500 million) last year, according to the Centre for Asia Pacific Aviation as a large number of airlines have started in the past four years, lured by a market that is expected to grow at around 25 per cent annually until the end of the decade.
"We are not in a hurry to choose a partner," Wadia said.
The Mumbai-based Wadia group fully owns Go Airlines. Headed by Nusli Wadia, it also owns textile major Bombay Dyeing, chemical company National Peroxide Ltd, the Bombay Burmah Trading Corp and plantations. GoAir, which has five aircraft, today took delivery of an Airbus A320 on Thuesday. The company''s fleet size will increase to 34 by March 2011, Wadia said, lower than the 50 it had originally planned.
Budget airlines accounted for 20 per cent of all seats sold worldwide last year, compared with 17 per cent a year earlier. Low-fare airlines have doubled their capacity in four years, OAG Worldwide, a travel and transportation data provider said last month.