Go Airlines (India) Limited

Go Airlines (India) Limited

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Company Background

Go Airlines (India) Limited is an ultra-low-cost carrier (ULCC) focused on maintaining low unit costs and delivering compelling value to customers that drives its unit revenues. The company is one of the fastest growing airlines in India, with an increase in domestic market share from 8.8% in fiscal 2018 to 10.8% in fiscal 2020 (Source: CAPA Report). Its target customers are young Indians and Micro, Small & Medium Enterprises (MSME) businesses.

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As a ULCC, the company is focused on maintaining a low-cost base and high utilization of its modern and fuel-efficient fleet. As of February 10, 2021, its fleet inventory consisted of 56 aircraft, of which 46 aircraft were A320 NEO models and 10 were A320 CEO models. Of these 10 A320 CEOs, three were in the process of redelivery, which will further enhance the homogenous nature of its fleet. All its aircraft use the same airframe and are sisterships with common configurations to reduce operational and maintenance costs.

The company's passenger volume increased at a compound annual growth rate (CAGR) of 22.4% from 10.8 million passengers in fiscal 2018 to 16.2 million passengers in fiscal 2020. Its market share of domestic passenger volume increased from 8.8% in fiscal 2018 to 10.8% in fiscal 2020. Further, in the current fiscal year, the company has added three new A320 NEOs to its network to support the expected growth in demand. Its route network is designed to support operational efficiency and includes capacity in slot-constrained markets in India.

As of January 31, 2020, the company covered a network of 28 domestic and nine international destinations. It has established strong positions in slot-constrained airports such as New Delhi, Mumbai, Ahmedabad and Pune, with the second-best overall Slot Efficiency in India during the period from fiscal 2018 to fiscal 2020 (Source: CAPA Report). Its slot efficiency generally, and particularly at airports that have constraints on slot expansion, gives them a significant competitive advantage. Go Airlines have a strong focus on operational efficiency and reliability to deliver a superior customer experience relative to other ULCCs and LCCs. The company had high aircraft utilization during fiscal 2020, with an average utilization of 12.9 hours per day with a high load factor of 88.9% (Source: CAPA Report).

Let us now look at a few competitive strengths and strategies of Go Airlines (India) Limited

Competitive Strengths

+ Simple, Fuel-Efficient, and Next Generation Fleet: Go Airlines is consistent with its Ultra Low-Cost Carrier (ULCC) model for operating its airline. The company employs a single aircraft type across its entire fleet (Source: CAPA Report). Its current A320 fleet consists entirely of sisterships with a single airframe and engine type. Its entire fleet is fitted with the lightest and most cost-efficient Buyer Furnished Equipment options. All of its aircraft have high-density seating with a seating capacity of 186 passengers for the NEO aircraft and 180 passengers for the CEO aircraft. The company offers a single class of service, which allows its A320 aircraft to have the maximum seating capacity. 82% of its fleet consists of NEO aircraft (as of February 10, 2021) and it expects that its entire fleet will consist of NEO aircraft by the end of fiscal 2024. Go Airlines has the highest percentage of next generation aircraft in its fleet compared to other Indian airlines (Source: CAPA Report). Having a uniform fleet also allows them to use any aircraft for any route, thereby simplifying and increasing the flexibility of its flight scheduling arrangements. This uniformity lowers costs by allowing them to have common maintenance procedures, training and spare-part inventories.

+ Strong Focus on Operational Efficiency and Reliability: Go Airlines have demonstrated high operational efficiency while continuing to demonstrate high operational reliability. In fiscal 2020, the company had the third highest aircraft utilization of 12.9 hours per day in India (Source: CAPA Report). It also had the second highest load factor during fiscal 2020 (Source: CAPA Report). The company maintains high utilization of its aircraft through efficient schedule management. For fiscal years 2018, 2019 and 2020, its average aircraft utilization in domestic operations for each day was 13.7 hours, 12.9 hours, and 12.9 hours, respectively. Go Airlines were the market leaders for on-time performance during the 15 months ended November 2019, as well as for the least flight cancellations in India at 0.3% during fiscal 2021 and had the lowest customer complaints at 0.3 per 10,000 passengers against an industry average of 1.0 during fiscal 2021 (Source: CAPA Report).

+ Established Position in Slot-Constrained Airports, With Best in Class Efficiency: Go Airline's market share in India has increased from 5.4% in fiscal 2010 to 10.8% in fiscal 2020. In fiscal 2020, the company established a market share of 14% in Mumbai, 12% in New Delhi, 14% in Pune, 25% in Ahmedabad, and 14% in Goa, which are among the top 10 airports in India (Source: CAPA Report). The company has a strategic network that serves slot-constrained major markets and can adapt dynamically to changing market conditions. Its network allows them the flexibility to redeploy its fleet from low-demand routes and markets to stable or high-demand routes and markets at a particular point in time. The company also bases its aircraft at airports that have high potential for passenger demand. In selecting destinations for international expansion, it targets routes which offer a high density of passengers per sector and attractive yields. To reduce the costs of parking its aircraft overnight, the company has focused its international operations on flights which return on the same day.

+ Selling Experiences for the Young Indian leisure and MSME Traveller: Go Airlines' customer acquisition strategy is targeted towards the growing number of leisure customers and Micro, Small & Medium Enterprises (MSME) business travellers in India. As a result of its widespread network across India, the company believes that it is uniquely tailored to serve these categories of Indian leisure and business customers. It categorizes its customers into leisure and business travellers. Its marketing efforts for leisure travellers are focused on the under-45 age group, which is the largest component of the Indian population (Source: CAPA Report). For MSME business travellers, the company leverages the point to point connectivity and same-day travel features of its route to attract and retain customers. It aims to maintain its market share in metro-metro routes while increasing its market share in non-metro to metro and non-metro to non-metro routes. Go Airlines total passenger volume for fiscal 2018, 2019 and 2020 and the nine months ended December 31, 2020 was 10.8 million, 12.7 million, 16.2 million and 2.4 million, respectively (Source: CAPA Report).

+ Demonstrated Track Record of Growth Across Key Performance Indicators: As a result of the company's disciplined execution of its ULCC business model, its passenger revenue has grown at a compound annual growth rate (CAGR) of 24.8 % from fiscal 2018 to fiscal 2020 and its Operating Revenue has grown at a CAGR of 25.2% in the same period. Its ASK grew at a CAGR of 30.2% between fiscal 2018 and fiscal 2020. Go Airlines's Available Seat Kilometer (ASK) CAGR growth was the highest compared to Spicejet and Indigo (Source: SAP Report). Also, its Cost per Available Seat Kilometer (CASK) grew at a CAGR of 7.2% in the same period. Its CASK CAGR growth was the lowest compared to Spicejet and Indigo (Source: SAP Report). The company's passenger revenue also grew at a CAGR of 24.8% between fiscal 2018 and fiscal 2020. Go Airlines also have demonstrated competitive cost metrics with potential for further efficiencies. In fiscal 2020, its Operating CASK, Fuel CASK, Maintenance CASK and Employee Benefits CASK were all lower than Spicejet and Indigo (Source: SAP Report).

Key Strategies

Here are a few strategies Go Airlines (India) Limited has for its business:

Reduce or restrain unit costs through disciplined execution of the ULCC Model
Expand and optimize network
Differentiated initiatives and multiple touchpoints for customers.
Grow ancillary revenue
Maintain strong capital structure to support its growth strategies and expansion of its fleet.

Key Financials

And finally here’s a look at key financials of Go Airlines (India) Limited

Revenue from operations

Particulars (in Rs. million)

Particulars (in Rs. million)

How to apply for an IPO?

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GO AIRLINE IPO FAQs

The IPO of GoAir is a main-board IPO. The price range for the IPO is yet to be announced. The IPO will be listed on the BSE and NSE.

The dates are yet to be announced.

The investors' portion for qualified institutional buyer (QIB) is 75%, that for non-institutional investor (NII) is 15%, and the same for retail investors is at 10%.

You can apply for GoAir IPO online by using the Kotak Securities platform and through UPI.

To apply for an IPO through Kotak Securities:
● Login to your Kotak Securities Trading platform
● Select the IPO you wish to apply for
● Enter the price and the number of lots you wish to buy
● Enter your UPI ID, and once you click on 'Submit' or 'Proceed' button, your bid is placed with the exchange
● Upon receiving block funds request on your UPI app, approve the request
● Upon successful approval, the required amount is blocked in your bank account
● Upon allotment, the blocked amount is deducted from your bank account, and the shares are credited into your Demat account

GoAir IPO size is Rs 3,600 crores and the issue entirely comprises of fresh issue with no OFS.

The price band for GoAir’s IPO is yet to be announced

The lot size for GoAir IPO is yet to be announced.

The allotment dates are yet to be announced.

The IPO listing data for GoAir is yet to be announced.

To know more about Go Airlines IPO, you can check out the below links:
Go Airlines (India) Company Background and More…
Go Airlines (India) IPO Details

You can apply for LIC IPO online by using the Kotak Securities platform , UPI and ASBA

No, you cannot use a current account to bid on the public offering of Go Airlines or any other IPO.

No, you cannot bid for the initial public offering of Go Airlines or any other IPOs using your minor daughter’s account. On the other hand, a minor can bid for IPOs through the ASBA process.

Accepting the Go Airlines IPO's UPI mandate or other public issue is not a problem. It is simple to do with a simple steps through an UPI App.