MUMBAI/NEW DELHI: Wadia Group-controlled budget airline GoAir has revived plans for an initial public offering and is looking to hire advisors for the same, two people aware of the matter said.
“GoAir has recently invited investment banks and lawyers to pitch for the mandate for managing the initial public offering (IPO) of the company," said one of the persons mentioned above, both of whom requested anonymity.
“The process is currently ongoing and the airline is yet to formally appoint the advisers for the process," added the second person.
A GoAir spokesperson said that the company does not comment on speculation.
The budget airline has weighed the idea of public offering several times before, the last being in 2017.
Earlier on Thursday, Moneycontrol.com reported that GoAir was planning to raise up to ₹2,000 crore through a public offering.
The plans come at a time when India’s domestic air passenger traffic is expected to grow in the low single digits in 2019-20.
Passenger traffic has slowed down from several years of double-digit growth, mainly because of a capacity shortage caused by the grounding of Jet Airways (India) Ltd.
Separately, GoAir said in a statement that it will add at least one aircraft to its fleet every month. The airline recently inducted its fiftieth aircraft.
GoAir currently operates 270 daily flights connecting 24 domestic and four international destinations.
It will now start flights to four new international destinations, said managing director Jeh Wadia.
GoAir, which carried 1.35 million passengers in May, also said that it is on course to touch the 100 million passenger mark in the next two years.
GoAir has carried about 72 million passengers since its inception in 2005.
The Mumbai-based airline had 11.1% market share in May, according to data from the aviation regulator Directorate General of Civil Aviation (DGCA).
The airline has recently seen an exodus of senior executives.
As many as 15 senior management personnel, including its chief executive, chief operating officer and chief commercial officer have left in a span of nine months beginning last July.
GoAir’s chief executive officer Cornelis Vrieswijk had resigned in February within nine months of taking up the position, citing personal matters.
The airline has also grappled with issues with Pratt & Whitney engines on its Airbus SE’s A320neo aircraft during the past year.
GoAir placed an order for 72 Airbus A320neo aircraft in 2011, before signing a memorandum of understanding with Airbus for another 72 Airbus A320neo in 2016, taking the total order to 144 aircraft.
However, induction of the aircraft has been delayed due to several issues, including the engine snags on the Pratt & Whitney engines that power the A320neo planes.
“In 2016, we looked at an aggressive business strategy and took a long call on India’s economic growth as well as the crucial role that GoAir has to play within the aviation sector. That year, we doubled our Airbus A320 aircraft order to 144 with a clear vision of accelerating growth and at the same time staying profitable," Wadia said.
“Those goals continue to be our guiding principle from a business perspective," he said.