Merger Talk denial by GoAir

GoAir denies merger talks with its largest rival in Indian aviation i.e. Spice jet. GoAir chief executive officer says that, they are not looking for any kind of merger with Spicejet. This all was told to reporters during a press conference on 25th March’09 in New Delhi. The merger has been denied by saying it as one of the rumors. The officer also said that Jet Airways and Kingfisher airlines too had a merger as a part of cost cutting by becoming code sharing partners, sharing crew and managing fuel so, there can be a consolidation with other airlines as a part of cost cutting.

The officer says that GoAir is planning to add on fleets, taking it to 20 by 2012 from current six. Though merger is good for airlines to come out of any kind of losses but still making decisions and implementing them is a task in itself. In the last the officer adds on that, an intelligent investor is always an opportunity but this all depends on conditions as well.

British Airways to strike a code-sharing agreement with Go Air

British Airways will soon strike a code sharing, co-branding and marketing agreement with GoAir. This would lead to an equity stake in Go Air by British Airways. By this code-sharing agreement both the airlines will get equally benefited, BA can mark its reputation in Indian market and Go Air can do the same in international market. BA is the largest passenger’s contributor after US so; this is definitely going to help Airlines industry in India. The deal would benefit Go Air by $350 million which is definitely a huge profit to the airlines. For this deal Go Air has appointed a London based Bank Euromax Capital for the transaction.

Indian Government is also looking forward to this agreement between the foreign airlines with domestic flights India. Earlier Royal Bank Scotland and Standard chartered were the two banks which were supposed to make an equity investment into GoAir. The IATA in response has said that 2009 will be the worse year than 2008 in terms of number of passengers and yield, so in these conditions a foreign airline having an equity share in Indian airline is definitely going to lessen the effect of recession in the market of airlines industry.

Recently announced Updated report of Jan-09 Indian Domestic traffic

Indian Ministry of civil aviation recently reported the total passengers carried by domestic airlines in Jan’09. The total passengers carried were 3.3 million. Air India carried 555000 passengers, Jet airways carried 596000 passengers, 241000 passengers were carried by Jet Lite, Kingfisher carried about 919000 passengers, 393000 passengers were carried by Spice jet, Go air carried about 81000 passengers and Indigo airlines carried about 457000 passengers in Jan’09.

The seat factors of domestic airlines in Jan’09 is nearly varied with each other: Indigo has 72.2% of seat factor, Spice jet about 68.3%, Jetlite 67.5%, Jet airways 64.8%, Kingfisher 64.0%, Go air 64.0% and Air India 60.2%. The report generated shows that Kingfisher airlines are ahead of others in carrying passengers and Indigo in seat factors in the month of Jan’09. The Jan’09 domestic traffic data is the result of introducing promotional flights airfares by almost all domestic airlines, report may vary a bit this month as there has been a rise in fares in Feb’09.

A new base fare of Re.1 introduced by Jetlite

As all Indian Airlines are hiking the base fares Jetlite introduced a base fare of Re.1 as a promotional fare. The fare is applied on some of Metro cities flights as well. Meanwhile Jet Airways also announced Rs.300 base fare on the flight routes to major cities. The fares will be effective from 30th April’09. Jet Lite introduced its promotional base fare as it heard about other airlines withdrawing the promotional base fares.

All airlines including Spice Jet, Indigo, Kingfisher and GoAir had a hike in their base fares; they all are now concentrating on earning revenues rather than seat factors. It was assumed that there will be a hike of Rs.1800 to Rs.2000 on the flights from Mumbai to Delhi. Air India in response to withdrawal of promotional fares said that the response was not upto the expectations, so they decided to discontinue with the promotional fares.

British Airway’s equity stake in Go Air

The British Airway’s chasing a 25% stake in Indian Go Air airlines. The officials have decided to have a meet in London for the further discussions sources says that British Airways has tried Last Year to reach a code sharing agreement with Go Air. Go Air spokesperson says that the airlines has 2.3% share in the market and would welcome such a change in policy and British Airways refuses what is said.

Foreign airlines will be allowed to invest in domestic airlines with a cap of nearly 26% with India’s changed policy plan. Though Go Air faced losses last year still it is a closely held company with its financial numbers not in the public. The decision to scale up the fleet by 35 aircrafts will be fulfilled till March 2011, recently added six and will add 20 by end of this year.