‘Market situation is not very easy ’

WOLFGANG PROCK-SCHAUER, chief executive officer of the Wadia groups’ airline, GoAir, talks about their expansion plan with Arindam Majumder. Edited excerpts:

What is your aircraft delivery schedule in the near term?

We will be getting three aircraft within the period from June to August.

In September, the normal delivery schedule will follow, which will take us to 37 aircraft by the end of this financial year. Of these, it will be 19 A320 neos.

How has 2016-17 been?

I cannot disclose the exact financials before the results are approved (by the board of directors) but what I can say it was definitely better than in FY16. We have been profitable.

How is the market situation? Have airlines regained pricing power?

Yields are still under a lot of pressure. That pressure on pricing continues. Everyone is expecting May to be a good month but this is a lean season. The market situation is also not very easy. There has been a strong increase in infrastructure costs; levies, charges have increased. All this contributes to a less conducive business environment.

GoAir is not adding new destinations. What is your route plan?

We fly to 23 destinations. What we want to do is to connect these cities with higher frequencies. That’s what our route planning will mirror in the near future.

These 23 airports represent something like 85 per cent of the total domestic passenger market in India. We want to become strong in these 23 markets. So, you will see addition of frequencies in these markets and then we will venture into new destinations. But, first, we want to be a meaningful player in these routes.

So, capacity addition in the existing routes is the way forward?

Yes, absolutely. Having a meaningful presence in existing markets is our goal.

How has the issue with the Pratt & Whitney A320 neo engine issue effected you? When will the situation become normal?

Due to the engine issue, we are a couple of months behind our delivery schedule for those planes. That has led to a situation where we’ve had to postpone our international expansion to the winter schedule of 2017-18. The second half of the year will lead to normalisation of our original plan. We are also quite confident on the measures taken by the manufacturer to rectify the faults. Hopefully, after it becomes normal, we can pick up according to our original plan of expansion.

Is leasing of planes an option?

Yes. I’m not ruling it out. We will look at all options but, right now, we are looking forward to the three new aircraft (expected by end-August).