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17-Jun-2011 11:03 AM

GoAir orders 72 A320neos

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.