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Go Air in turbulence?

 
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karatecatman
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PostPosted: Tue Jan 16, 2007 2:18 pm    Post subject: Go Air in turbulence? Reply with quote

Economic Times says that Go Air may be facing the heat.
Lot of their troubles are being covered over in management talk, but they may be getting into turbulence.

http://tinyurl.com/y9my9a
NEW DELHI: The rapid expansion of seat capacity in the domestic aviation market is taking its toll on the players. Jeh Wadia's GoAir is undergoing a churn with some senior management people quitting, and its fleet size reducing from seven to five in the next two months. Further, there would be no network expansion over the next six to eight months, with at least two destinations going off air.

The top management of the company terms the downsizing of operations, as “fleet optimisation” which would help reduce cash-burn in the lean travel months. “This will help us become cash-flow positive and profitable over the next two months,” Mr Jeh Wadia, managing director, GoAir, told ET.
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malQ
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PostPosted: Tue Jan 16, 2007 3:49 pm    Post subject: Reply with quote

Hopefully they will come out of it, with costs pruned and expenses made more efficient.

As of now, each aircraft is a different colour, with matching interiors, which muct be expensive to maintain. Unlike if they were all the same.

Then, the leased aircraft seem to have come from all over, so what commonalities or lack thereof exist, not known.

And finally, what is the track record of the people behind the airline, in other industries. Look carefully, and it is clear that for a few decades after 1947, the inertia levels inherited were more than enough. But now, everything is fair in business, and the reality is there to see.

You want to run an LCC, you got to party with your customers, that's what I've seen worldwide. Can't have a social persona which conflicts with the basic LCC model. And that's the last bit - the advisors the Wadias have are not able to tell him that. Or don't want to.
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the_380
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PostPosted: Tue Jan 16, 2007 4:57 pm    Post subject: Reply with quote

Are these tough times only for Go or has the bubble started to burst?
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starvmgopal
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PostPosted: Wed Jan 17, 2007 9:08 am    Post subject: Reply with quote

I flew Go in December from BLR-DEL-BLR

They are a good airline, but there are some idiosyncacies that they need to iron out to keep customers---as reliability/safety is the only loyalty for conumers in the LCC circuit.

The problem is that they had 2x daily flights BLR-DEL-BLR and they cancelled one of them and pushed the flights together. So we got a SMS to the mobile asking us to call. But u need to call their 1800 at 6 am to get a response because its too busy during the day and "hindi mein jhankari ke liye ek dial kare...english mein do...." doesn't work at all during peak hours. So u need to be persistent.

Service was good. With free water bottles available at plenty. Flight attendants quite good looking and the uniforms were spiffy--mini skirts and fitted suits dark blue with the neon necks that match their plane's tails. Leather seats on A320 aircraft leased from Latin countries.
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Nimish
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PostPosted: Wed Jan 17, 2007 3:17 pm    Post subject: Reply with quote

Quite sad to hear that GoAir might fold. But I guess rationalization/ consolidation is bound to happen sooner or later, and then we can talk of "those days with those low fares"!

Getting into the airline business is definitely a sure way to loose money, so I wonder why everyone is so keen to jump into it?
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HAWK21M
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PostPosted: Wed Jan 17, 2007 8:40 pm    Post subject: Reply with quote

Goair seems stronger than a couple of others.Hope its only a rumour.
regds
MEL
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the_380
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PostPosted: Thu Jan 18, 2007 1:26 am    Post subject: Reply with quote

HAWK21M wrote:
Goair seems stronger than a couple of others.

Most airlines have come out this time with heavy finances. So the bubble might take time to burst till it drains the funds if the weaker ones. But G8 seems to be a good airline (TR by nimish)
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ssbmat
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PostPosted: Thu Jan 18, 2007 9:15 am    Post subject: Nows the time for mergers and consolidation Reply with quote

Now would be a good time to initiate talks with Indigo or even Air Deccan.
That would "Simpli-fy" choices for Indian travelers.
I feel there is a need to have carriers like
AI+IC

Jet, KF (hubs at BOM, serving lots of business traffic)

SpiceJet, Indigo+GoAir (?) (hubs at Delhi)

Air Deccan (BLR, HYD, MAA). AI/IC would also provide competition here.

I have also catered for competition so no single carrier becomes dominant.
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JumboJet
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PostPosted: Thu Jan 18, 2007 11:54 am    Post subject: Reply with quote

G8 has deep pockets. Wonder if these are just rumors.

Most of the players, will surely start an IPO {As if their main motto was just that}.
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karatecatman
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PostPosted: Thu Jan 18, 2007 12:07 pm    Post subject: Reply with quote

Latest market figures released show that Air Deccan is now number 2.
Jet is first, Air Deccan second with 19.8% and Indian at 19%
Air Deccan currently has the largest route network covering 61 airports, while Jet Airways has 46 airports and Indian 43.
The primary reason for Air Deccan becoming the country’s number two airline is "fleet underutilisation" by Indian.

IA really needs to resolve the grounded A320 issue.
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the_380
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PostPosted: Thu Jan 18, 2007 1:06 pm    Post subject: Reply with quote

JumboJet wrote:

Most of the players, will surely start an IPO {As if their main motto was just that}.

And then even possible they exit the business overnight
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Nimish
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PostPosted: Thu Jan 18, 2007 4:19 pm    Post subject: Re: Nows the time for mergers and consolidation Reply with quote

ssbmat wrote:
Now would be a good time to initiate talks with Indigo or even Air Deccan.


While this sounds like a good idea, what will DN or 6E stand to gain by buying G8? G8 probably does not have any assets or brand recognition or slots or anything else that are of value to the other LCCs. Besides, both DN and 6E have a huge fleet on order, they don't need the leased birds that G8 operates either.

So while consolidation is definitely needed, it's probably not going to be at profitable terms (for G8 or similar).

Now if it were S2, then there's probably a fair bit of value - intl rights for one, and slots/parking bays for the other.
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VABBy
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PostPosted: Thu Jan 18, 2007 8:54 pm    Post subject: Reply with quote

karatecatman wrote:
Latest market figures released show that Air Deccan is now number 2.
Jet is first, Air Deccan second with 19.8% and Indian at 19%
.



Can u enlighten us with the latest figures and the link

thanks
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JumboJet
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PostPosted: Thu Jan 18, 2007 9:36 pm    Post subject: Reply with quote

Can you suggest what parameters the ranking was based on Question
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ssbmat
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PostPosted: Fri Jan 19, 2007 9:59 am    Post subject: Reply with quote

Agree-on the point that Air Sahara would have bigger value in terms of slots and international rights, but here is the thing
- With bilaterals being loosened every day with major countries, there is already scope for other airlines to stake claim to frequencies.

- It wouldnt be a bad idea to have Indigo combine with GoAir. The benefit is purely on the operational side with fleet commonality. It benefits fixed costs like crew training, mx, spares so I dont think that can be ignored totally. Maybe DN may not need the extra planes but Indigo is private equity-can utilize whatever benefits it gets.

-DN has a more solid foundation and its ATR based "ground up" approach may actually work.

-A G8+ Indigo can attempt to carve a niche/exclusivity by competing side-by-side with SpiceJet out of Delhi.

Alternately, The combine may also launch the first Indian pure-play LCC services to S.Asia/Gulf in the next 2 years.
DN has more diverse market needs like building B/C town connectivity.
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malQ
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PostPosted: Mon Jan 22, 2007 3:29 pm    Post subject: Reply with quote

I think nobody going to touch GoAir now, even at the point of a gun. This sort of behaviour, carrying live weapons and ammunition on board, is simply not excusable.
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