Nusli Wadia looks to sell stake in GoAir

Nusli Wadia, the corporate samurai of the 1980s, believes that airlines is not the “right business to have gotten into”, and that the Bombay Dyeing Group is looking to sell a stake in GoAir, the group’s airline venture.
“I don’t think it was the right business to have gotten into. But we’re in it. The airline business is a very, very tough one. The capacity growth in India has been far too great... And so today, planes are not filled. And where they are reasonably full, the prices are ridiculous. I mean they are unviable,” he told ET NOW’s Rohini Singh in an exclusive interview, the first he has given in nearly 10 years.
He also affirmed that the group is looking to sell a stake in Go Air, the airline venture run by his son Jeh Wadia.
“Yes, yes, we are. We are certainly looking for a strategic partner simply because we need to get, I think, financial involvement of somebody. Apart from that, it is always good to have partners in a business who bring value to the business,” he added.
He blamed Go Air’s poor performance on industry overcapacity, government rules and high taxation. “The government rules are such that I am a bit surprised — we have to have our own ground handling, we can’t outsource what we want to outsource. And then the taxation is crazy. I mean we pay 27% average tax on fuel. Now where is the product that pays 27% in the service industry? So, it is these sort of things which distort the ability of the airline industry,” he added.
10/07/09 Economic Times

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Categories: GoAir Jul 2009