India’s GoAir Set To Launch IPO In August

Indian low-cost carrier GoAir is proceeding with its IPO (Initial Public Offering) and now has a prospective date for the launch. The carrier will likely kick off its public listing in August, assuming it receives clearance from regulators next month. If successful, GoAir would become India’s fourth major airline stock to offer an IPO.

GoAir A320
GoAir has considered an IPO in the past as well, but this latest attempt is looking likely to go through. Photo: Getty Images

Inching closer

According to Economic Times, sources have indicated that GoAir has decided to issue its Initial Public Offering (IPO) in August. India’s market regulator, SEBI, is expected to green-light the listing by the end of July, clearing all regulatory hurdles for the airline.

As reported earlier, GoAir is planning to raise ₹3,600 crores ($493.3 million) through its upcoming IPO. Approximately 55% of these funds will be used to pay off the airline’s growing debt pile and an additional ₹240 crores ($32.9 million) will go to repaying fuel provider Indian Oil Corporation.

GoAir A320 engine Getty
GoAir’s debt has become a growing issue for the airline as the pandemic takes a huge toll. Photo: Getty Images

The remaining funds will go towards operational changes at the airline. This would include growing the fleet of Airbus A320neos, adding new destinations, and much more. With IPO preparation now in full swing, this time seems to be the real deal for GoAir.

GoAir would be the fourth major Indian airline to publicly list, after IndiGo, SpiceJet, and Jet Airways.

Changes

While the public listing is a huge step for the airline, this isn’t the only change the carrier is making. Sources have revealed that GoAir plans to become an all-A320neo airline by 2024, retiring the remaining seven A320ceos. Additionally, the carrier will also add another 10 A320neos to its fleet to offset the losses. These planes are part of GoAir’s existing order with Airbus.

These changes will allow GoAir to continue its expansion and deploy more fuel-efficient aircraft on all routes. Additionally, fleet uniformity will reduce aircraft engine and maintenance costs in the future, a substantial saving in the long run.

GoAir Airbus A320-200
GoAir will say goodbye to all of its A320ceos by 2024, making it India’s second all-A320neo airline after IndiGo. Photo: Laurent ERRERA via Wikimedia Commons

According to ch-aviation, GoAir has returned four A320ceos to lessors since March 2020. However, these are likely due to the leases ending rather than an advancement of the schedule. This explains why the airline is taking until 2024 to retire the remaining seven jets and not removing them earlier.

Reshaping

In addition to all of this, GoAir rebranded itself as Go First in mid-May, a move meant to signify its shift to India’s first ultra-low-cost carrier (ULCC). This shift to a ULCC is being led by none other than the man behind Spirit’s own transformation, Ben Baldanza. Baldanza joined the airline as Vice President last month, after serving on the board of GoAir for years.

Go First A320
GoAir is in the process of rebranding itself as Go First (representational image). Photo: Simple Flying

One big focus of this shift to an ultra-low-cost airline will be increasing ancillary revenue. Go First is targeting growing its ancillary revenues from 7% to 20% to diversity its stream and offer more paid services. The coming months will offer more clarity on Go First’s IPO and its transformation as Indian aviation reels from COVID-19 once again.

What do you think about Go First’s IPO plans? Let us know in the comments!


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