The Story Of Go First: India’s Ultra Low Cost Carrier

Go First is an Indian budget airline with its headquarters in Mumbai. Owned by the Indian business conglomerate…

The Story Of Go First: India’s Ultra Low Cost Carrier

Go First is an Indian budget airline with its headquarters in Mumbai. Owned by the Indian business conglomerate Wadia Group, the airline operates an all-Airbus A320 fleet to 38 destinations in India and abroad. As of 2021, it is the third-largest budget airline in the country, behind IndiGo and SpiceJet. Apart from Mumbai, some of the airline’s other bases include Delhi, Bengaluru, Chennai, and Hyderabad.

Indian budget carrier Go First has been in business since 2005. Photo: Getty Images

Go First was established in 2004 as a low-cost carrier GoAir. Owned by one of Indian’s oldest conglomerates Wadia Group, the airline began operations in 2005 with a single Airbus A320 aircraft. As of 2021, the carrier’s fleet has grown to 57 A320 airplanes, most of which are the NEO versions.

After 15 years of operations, the airline rebranded itself in 2021 and changed its name to Go First in an attempt to become India’s first ultra-low-cost carrier. Soon after its rebranding, Go First also received permission for an IPO, making it the fourth airline in India to be publicly listed after IndiGo, SpiceJet, and former Jet Airways.

Growth over the years

The carrier, then called GoAir, started around the same time as SpiceJet. Back then, Jeh Wadia of the Wadia Group was looking to either invest in SpiceJet or the recently-launched Air Deccan, or start his own airline altogether. In November 2005, the carrier flew its first flight using an A320 between Mumbai and Ahmedabad.

Even with an early entry into the Indian LCC market, GoAir didn’t quite expand aggressively like some of its competitors did. By 2011, it was operating 10 A320s, and the same year it placed an order of 72 Airbus A320 airplanes worth $7 billion. In contrast, IndiGo, which started operations a year after GoAir, had already placed an order with Airbus for 180 A320s.

GoAir travel coronavirus getty images
Despite an early entry into the Indian LCC market, Go First hasn’t captured a vast market share. Photo: Getty Images

Despite its relatively small size, the carrier has almost consistently turned a profit until 2019. Over the years, its network expanded gradually, with its first international flight between New Delhi and Phuket, Thailand on October 11th, 2018.  By 2020, its international destinations grew to 10 but restricted to a narrowbody range of South East Asia and the Middle East.

In November 2019, keeping in mind its future growth, the carrier placed a firm order of 144 P&W GTF engines to power its 72 A320s that would join its fleet in the years to come. But despite these attempts, the airline has not been able to capture the market share it had initially hoped for.

Over the years, Go First has struggled to keep its top management stable. As reported by the Economic Times, at least seven CEOs have left the airline in the last 15 years, sometimes with gaps in between. Some of them made rather quick exits, not even serving the company for one year.

GoAir
The carrier has seen significant churn in top management in 15 years. Photo: Getty Images

Rebranding and IPO offering

Despite not very high revenues, the airline managed to stay profitable for quite a few years. However, Go First’s last profitable year was 2019, and since then the carrier has been struggling financially. It couldn’t cope with pandemic-induced restrictions with its low market share and negligible international flights and had to look for other ways to stay afloat.

In May 2021, the carrier announced its new name Go First and a rebranding strategy that tilted towards a ULCC model. An initial public offering soon followed in order to raise approximately ₹3,600 crore ($491 million).

Go First A320
In 2021, GoAir rebranded itself as Go First. Photo: Simple Flying

It remains to be seen to what extent these strategies will help Go First in the long run. While the Indian LCCs already offer competitive fares and features such as optional meals, the extent of unbundling of fares required for a ULCC model hasn’t been experimented with in India so far. As reported, the DGCA did relax its rules for unbundling fares in February this year, but only time will tell how Indian passengers react to this model. Go First’s IPO was also more to eradicate debt rather than for future growth – something that investors will think of before parting with cash.

While Go First has been making changes to its business strategy to stay afloat, we will have to wait and see how much of an impact it makes on the carrier’s long-term growth, especially with all the changes predicted in Indian aviation in the next couple of years.

Source : Simple Flying More   

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Flying Pencil: How Much Is A Boeing 757-200 Worth In 2021?

The Boeing 757-200 was far and away the most popular plane in the plane builder’s 757 series. Of…

Flying Pencil: How Much Is A Boeing 757-200 Worth In 2021?

The Boeing 757-200 was far and away the most popular plane in the plane builder’s 757 series. Of the 1,050 Boeing 757s manufactured, 913 were 757-200s. With production ending in 2004, the Boeing 757-200 numbers are thinning, but several airlines still use the type. With this in mind, exactly how much is a Boeing 757-200 worth in 2021?

United Airlines is now the second-largest operator of passenger configured Boeing 757-200s, with 51 still in the fleet. Photo: Vincenzo Pace/Simple Flying

A broad variation in price for Boeing 757-200s in 2021

There remain 250 Boeing 757-200s still with passenger airlines, although around one-third are parked. The plane remains popular in the United States. Delta Air Lines still has 111 of the type, and United Airlines has 51. Combined, these two airlines operate 162 (or 65%) of the 757-200s still flying passengers.

Measured by fleet size, other Boeing 757-200 operators are Icelandair (15 jets), Azur Air (ten),  Jet2 (eight), Royal Flight (four), SCAT Airlines (four), TUI Airways (four), Turkmenistan Airlines (four), and AZAL Azerbaijan Airlines (three).

Keep in mind the 757-200 was produced between 1981 and 2004. List prices from that era might seem like a bargain these days. In 2002, not long before production ended, Boeing was asking around US$65 million for a fresh off the production line 757-200.

Fast forward two decades, and what’s a Boeing 757-200 worth today? Simple Flying uses data from ch-aviation.com, which calculates the value of most aircraft with the help of Collateral Verifications LLC.

According to ch-aviation.com, the going rate for a Boeing 757-200 is now US$3.58 million to $11.27 million. That’s a pretty broad price range, but a range of factors will determine a final asking price on the second-hand aircraft market. Those factors include the aircraft’s airframe hours and age, engine hours, installed equipment, records and airworthiness directives, damage history, exterior presentation, and interior presentation.

boeing-757-300-worth-2021
Delta is now the world’s biggest operator of Boeing 757-200 passenger planes. Photo: Vincenzo Pace/Simple Flying

A variety of factors will determine a plane’s resale value

It follows that an older Boeing 757-200 is worth less than a newer 757-200. It will invariably have flown more hours. Over the long term, any aircraft loses a certain amount from its value for every hour it flies over the fleet’s average.

Also important is who the aircraft flew with. A slightly older plane that’s been with an airline with a blue-chip reputation for maintenance could be more valuable than a 757-200 that’s been an airline with a less than stellar reputation.

Buyers are interested in how old the engine is, how many hours the engines have operated for, and how well the engines are maintained. Old workhorse airlines like the 757 can fly on and on if an airline takes care of the engines and airframe.

Any plane with up-to-date avionics and other contemporary technology will be worth more than a comparable plane lacking them. Dodgy air conditioning, aging deicing gear, and out-of-date cockpit technology can all detract from a plane’s resale value. Most good operators will have invested money in keeping older aircraft like the 757-200 up-to-date.

Buyers also like decent records, and a plane with a full set can command a price premium. Again, keeping the airworthiness certificate, engine and airframe logbooks, and flight manuals are simple procedural housekeeping for most airlines.

Among other things, complete records will reveal any incident and accident history. Like a car, an aircraft that has sustained damage is usually worth less than one that hasn’t.

TUI Boeing 757 Skiathos Getty
Tui Airways still flies four Boeing 757-200s. Photo: Getty Images

Freighters keep the market for 757-200s bubbling along

Finally, presentation is important. A shiny paint job and tidy cabin will always appeal more than a battered-looking plane with shabby ripped seats. The presentation may not impact on the airworthiness of the aircraft, but it certainly creates or negates a perception of value.

While the number of Boeing 757-200s flying passengers is declining, there are still ample opportunities to fly one. And the plane has a way to fly yet. As passenger airlines retire 757-200s, there is an active market among freight airlines for the type.

Just like the 757-200 ticked so many boxes for passenger airlines over the past four decades, the plane is proving a big hit among freight carriers. The demand from them is helping put a floor under the resale value of the Boeing 757-200.

Source : Simple Flying More   

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