Delhi-Mumbai focus puts GoAir in trouble

Mumbai: Wadia Group’s GoAirlines (India) Pvt. Ltd, which runs low-fare carrier GoAir, could be forced to pull out from some of its most profitable routes because of a near boycott-like decision by peers not to help it meet a regulatory requirement that mandates India’s airlines also connect remote areas.
India’s aviation rules mandate domestic airlines fly a certain percentage of their flights to smaller cities and towns that are poorly connected. GoAir had met this requirement by buying seats from other airlines that fly to such regions, while operating its own flights only on the more lucrative routes.
But now rival carriers have said they will not be able to continue such transactions any longer as they are also pulling back on such unprofitable routes.
“All airlines are making losses and we all need to cut routes,” said a senior executive with a New Delhi-based airline. “We also have to meet the requirements set by the government (on us) and are not in a position to sell excess seats to GoAir.”
The executive, who didn’t want to be identified, also said GoAir has crowded the Mumbai-Delhi sector — the most profitable in India and accounting for nearly one-sixth of the country’s air traffic by passengers — by deploying its maximum capacity in this route. GoAir runs a fleet of six planes, most of which are deployed on eight flights daily between the two cities. It has minimized the number of flights to other cities.
24/07/08 P.R. Sanjai/Livemint

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Categories: GoAir Jul 2008