After IndiGo Initial Public offer (IPO) response; GoAir is planning to raise Rs.1000 crore through IPO

India will be the third largest market worldwide by 2020, as per forecast. The Indian aviation market is seeing good growth in passenger numbers on the back of lower fares driven by lower fuel prices. Indian airlines have reported profit in Q3 FY16 with rising Passenger load factors (PLFs).  As per the DGCA data, Indian airlines registered 19.71% jump in passengers in December 2016 as compare to same month last year with 75% seat capacity. Just like growth in domestic market, International traffic in India has been growing in double digits -- a rarity in today's world economy.

After positive response from InterGlobe Aviation (IndiGo) Initial Public Offer (IPO), GoAir have started its IPO process targeting its listing in this year. GoAir would be the second domestic carrier to come out with an IPO; it is expected to raise nearly Rs.1000 crore through IPO. However, the both the airlines are as similar in some ways. In comparison to IndiGo’s fleet of 97 aircrafts, GoAir’s fleet is miniscule with just 19 planes. GoAir has big plans going forward and to meet the growing demand GoAir has placed an order of 72 “Airbus 320 NEO” aircraft worth of Rs 32,400-crore. The deliveries will begin from April 2016; GoAir would add 2,700 seats till 2020-2021. Apart from IPO GoAir is looking for strategic partner and talking to foreign airline for foreign direct investment.

GoAir’s strategy of focusing on metro routes (24% of its flights route) is helping to keep itself profitable for 2015 financial year after IndiGo. According to Aviation consultant Centre for Asia Pacific Aviation India (CAPA) estimates the airline earned at least Rs. 84.0 cr in the fiscal year ended March 2015.

GoAir is the 5th largest domestic carrier started its operation in Nov 2005, under Jehangir Wadia. It operates domestic passenger services to 22 cities with over 140 daily flights and approximately 975 weekly flights with market share of 8.2% (November 2015) and flew 79.6 per cent of its flights on time (December 2015). As of February 2016, it operate 19 aircraft (15 are dry leased). Due to the small size of its fleet (19 aircraft), GoAir does not operate any international flights as per the guidelines of the Ministry of Civil Aviation, Government of India, but in 2012 the airline has applied for a waiver regarding the same to the ministry which is yet to be approved. GoAir has been awarded “Best Performing Airline in the Airbus A320 category.