Tuesday, April 8, 2014

Go Air : The Silent Performer

In an industry where brands are being built and glamour quotient is highest, GoAir continues to be one which performs silently. With hardly any financial information being given out since it is a privately held company, one can only guess based on news reports given out from time to time.

While there is a lot that can be written about the history of the airline, culture, top level exits – as reported by media, I have kept this article restricted to its current schedule and its analysis.

GoAir started with its hub in Mumbai in 2005-06 with a European philosophy of deploying additional capacity in Europe in the peak months of EU, which co-insides with the lean season here. However those experiments failed and the first few years were spent in choosing routes and discontinuing them. It wasn’t restricted to flights but extended to stations, launching Chennai, Hyderabad, Pune, Coimbatore and then discontinuing them one by one to shrink the network. This phase was similar to what SpiceJet is doing today – Shrinking to regroup and expand again, just that GoAir then looked too small to shrink further and re group.

GoAir also placed an order for 10 A320 (firm) + 10 A320 (options) and the delivery of the new aircraft helped stabilize its operations post 2008-09 ( 7 aircraft in service in 2009).

Today GoAir has a fleet of 18 aircraft and 1 more VT-GOR MSN 6072 which will be delivered shortly to take the count to 19 aircraft, just 1 short of the current regulation for flying international. The famous 5/20 rule, which mandates 5 years of domestic flying and a fleet of 20 aircraft before going international could well be changed as the new government takes the seat of power in Delhi and it would be almost at the same time that Go Air satisfies this rule, since it is only an aircraft short, having completed 5 years of flying in 2010-11.

GoAir today flies to 21 destinations across the country, without any monopoly routes under its umbrella. The last to Nanded was discontinued over a year ago. It operates 1075 flights a week (154 flights a day).

21 destinations across the country. (Image courtesy: gcmap.com)

Of its 21 stations, 7 are in North India, 5 in the East, 5 in the West and 4 in South. For a long period of time, flights to Gauwahati and Bagdogra, remained the only flights to the East, until GoAir launched services to Patna in 2009, followed by services to Kolkata and Ranchi in 2011. The expansion in south, which had restricted presence (only Bangalore & Kochi) was increased by adding Chennai & Port Blair to the network in 2012.

Post 2010, the focus was always on consolidation of stations, where in the stations launched were given additional connectivity and frequencies. Patna and Ranchi were connected with multiple frequencies to Delhi and Mumbai, Portblair which was connected to Delhi via Kolkata, was connected to Mumbai via Chennai.

Currently, Delhi & Mumbai have come up as hubs with Delhi connected to all stations except Chennai, Jaipur & Chandigarh by direct flights or one stop flights.

Network From Delhi (Image: gcmap.com)

The network from Mumbai, is not as extensive as Delhi, since it does not connect one to Kolkata, Bagdogra, Gauwahati & pune – which is for obvious reasons.
Network from Mumbai (Image: gcmap.com)

The concentration of flights region wise looks like below,

 The West & North cover three fourths of the departures for Go Air thus making it a little weak in terms of being a preferred carrier for business in the south and East of the country.

The maximum departures are from Maharashtra where it flies to three destinations – Mumbai, its hub along with Pune and Nagpur & from Delhi – which again is its hub.

After being perceived as a leisure carrier for years, it has in the recent past moved on to take lead in business traffic as well.

Small Network, Slow Expansion, Mix of Business & Leisure Routes, Slots in Congested Airports
Not seen as a stable carrier, Too Many Frequent top level exits, Not a preferred Business Carrier
72 aircraft on order - All A320 NEOs, Attractive valuation for foreign airlines to invest in the country
New airlines - Tata-SIA, Air Asia, Poaching of critical staff like pilots, Frequent cheap fares by struggling carriers


As Go Air starts taking deliveries of its 72 aircraft on order, starting 2015, it will attempt something it has never done before, inducting 1 plane a month. This is something which even IndiGo does not do yet. It will have to launch new stations in quick succession, ramp up its revenue management and start moving towards being a leader in fares than being a follower by merely matching up fares.

In India, where market share follows capacity share, Go Air should have the ability to lose money as it grows capacity and appetite to fight it out in the market to gain market.

Hyderabad – the only metro not served right now, should come up sometime soon and so should flights on some major routes, which are currently not served. They include flights to Chennai from Delhi, Kolkata from Mumbai, Bangalore & Chennai. A lot also depends on the availability of capacity at airports and GoAir might start looking at night parking their aircraft at secondary airports in the country since the major ones like Mumbai & Delhi might run out of Night Parking by mid 2015 and Kolkata and Chennai will continue to be constrained in terms of Slots and Night Parkings.


*Information related to flights, schedules has been taken from the website of GoAir (www.goair.in)

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