British Air wants to buy 25% in GoAir

Mumbai: UK’S flagship airline British Airways (BA) is looking to pick up a 25% stake in Wadia group-promoted no-frills airline GoAir.
Officials from BA and GoAir will meet in London next month to take discussions forward, said two industry sources familiar with the development to ET.
Two weeks ago, BA’s merger talks with Australia’s Qantas did not fructify. It is learnt that the third-largest carrier has been seeking a deal with an Indian carrier for a while now. Interestingly, BA tried to reach a code sharing agreement with GoAir last year.
“The interest in buying equity stake in GoAir comes in the wake of the development that the Indian government is considering a proposal to allow foreign airlines to pick up stake in domestic carriers,” said one of the sources. GoAir has a market share of 2.3%.
A GoAir spokesperson said, “GoAir would welcome a change with regards to the foreign direct investment policy allowing foreign airlines invest in the industry. The airline does not have any agreement with any other foreign carrier at the moment.” A BA spokesperson from London, in an email response to ET said, “As a matter of corporate policy, we do not comment on speculations.”
GoAir is a closely held company and its financial numbers are not in the public domain, though it is learnt that it incurred substantial losses last year. The airline had dues of Rs 8.81 crore payable to the Airport Authority of India .
Meanwhile, GoAir has decided to scale up its fleet size to 35 aircraft by March 2011 from the current six in two tranches. It is also planning to add 20 aircraft this year and bring in another nine in the next two years.
05/12/08 Mithun Roy/Economic Times

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Categories: Foreign Jan 2009, GoAir Jan 2009, New Jan 2009