Go Air in talks with European carriers for maintenance work

Chennai, April 19 (IANS) With its fleet size set to expand, low cost carrier Go Airlines is in talks with two European carriers for an aircraft maintenance and spare parts agreement, a top company official said Thursday.

The airline, which would begin operations from Chennai from May 1 as part of a strategy to strengthen the existing network, wants the government to relax the norms of Indian carrriers flying overseas.

"We are in talks with two European carriers for aircraft maintenance and spare parts agreement. The talks are on and the deal is yet to be finalised," Chief Executive Giorgio De Roni told reporters here.

Currently, the aircraft maintenance is done in-house. "With our fleet size increasing it is better to have a maintenance agreement with another carrier so that costs come down. The minor maintenance activities will be carried out here and for major overhaul the aircraft would be flown abroad," Kamal Kikani, vice president, customer service and airports, told IANS.

He said the Go Airlines fleet size will go up to 20 by 2014 from the current 12. From the first quarter of 2016 supplies of 72 aircraft (at an outlay of $7 billion) ordered with Airbus would begin.

Stating that the company has started the process for applying for licence to import aviation turbine fuel (ATF), Roni added that logistical issues involved in evacuating the imported ATF from the port to the carriers needs to be addressed first.

"Our new aircrafts would enable us to save around 15 percent fuel cost," Roni added.

On the issue of foreign direct investment (FDI), Roni said the company would evaluate opportunities once it is allowed by the government.

Asked about Go Airlines flying overseas with its fleet size set to increase manifold, Roni said: "An Indian airline planning to fly overseas should have at least 20 aircraft. This norm needs revision as some of the foreign carriers flying into India operate less than 20 aircraft."

Though he said the company's core focus is on the domestic routes and not long haul routes Roni did agree that some of the new aircraft that are to be delivered from 2016 will be modified in tune with planes flying on international routes.

Declining to comment whether a shakeout is to happen in the Indian aviation sector, Roni said Go Airlines did not look at mergers and acquisitions as part of its growth strategy.

He said there was a capacity increase last fiscal forcing airlines to price the seats below cost.

"We have made a marginal loss last fiscal with our load factor slightly lesser than 80 percent. However, this year we expect to be profitable. Our target is to carry around five million passengers up from four million we carried last fiscal," Roni said, declining to share any numbers.

Looking ahead, Roni said the company will look at opportunities to fly out of other cities like Chennai.

Roni said the airline will introduce double daily round trip services between Chennai-Mumbai, a daily flight between Chennai and Pune and five weekly frequencies between Chennai and Port Blair.