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GoAir orders 72 A320neos

17-Jun-2011 11:03 AM

GoAir MD Jeh Wadia stated the carrier has agreed to acquire 72 A320neos, worth USD7.2 billion at list prices, with deliveries to commence in 2015 (Gulf News/Bloomberg/Reuters/The Hindu/Economic Times/Wall Street Journal, 17-Jun-2011). The order brings GoAir’s total order book with Airbus to 92 aircraft valued at USD9.6 billion, Mr Wadia said. GoAir described the order as a "game-changer" which would help it boost its presence in the fast-growing domestic market. GoAir will decide on its engine selection for the aircraft by 2012 . “Till a few weeks ago Pratt & Whitney engines were better, but CFM is developing new engines with better technology … we may opt for that,” GoAir's new CEO, Giorgio de Roni, said. GoAir will fund the aircraft through a mix of equity and debt with the carrier stating it does "not need outside help to fund this deal". 

GoAir: “In terms of aircraft, we see tremendous potential in India, which has barely six airlines with 350 aircraft catering to a billion people, compared to China’s present 1100 aircraft ... with all the present orders placed by Indian carriers, we would only reach 1100 aircraft by 2020. SouthWest, a domestic airline in America, already has close to 700 aircraft. So the potential for growth in Indian aviation is huge ... With India’s GDP growing at a brisk 8%-9% p/a, we see a great future ahead for the aviation sector, including GoAir. Our strategy is to fly those who currently don’t fly ... We are evaluating various fund-raising options [for the deal]. It will be a combination of debt and equity,” Jeh Wadia, MD. Source: AP/The Hindu, 17-Jun-2011.

GoAir: "These [72 A320neo] aircraft will give us a further competitive advantage of up to 15% on efficiency, primarily gained from a much improved fuel burn. We will start receiving aircraft at the rate of 15 a year starting from 2015. The fleet acquisition will be funded through a mix of equity and debt and there are no immediate plans to raise funds or an initial public offering (IPO).” Jeh Wadia, MD. Source: The Hindu Business Line, 17-Jun-2011.