GoAir open to strategic investments

MUMBAI: The Jeh Wadia-spearheaded private airline, GoAir, will tap the capital market only after two years while being open to equity dilution in the form of strategic investments during the interim.

"We will come out with our IPO only after two years, sometime in FY 09 at the earliest," GoAir Managing Director Jeh Wadia told media here on Sunday.

The company, which achieved the highest load factor in the industry in the first three months of this year at 79 per cent, will utilise the time to build its track-record and emerge in a position to provide value to shareholders, he said.

On equity dilution in the near-term, Wadia said the company had received various proposals and was evaluating them. "We have yet to take a call on whether we even want to sell a stake to investors. Then we will decide to whom to sell and what price."

There is no time-frame fixed for a decision on the matter, he said, adding equity dilution will depend entirely "upon the merit of the proposal."

The company is presently categorising the investors into purely financial investors and strategic investors. The latter bring more than money to the table, he said, adding "we will zero in on prospective investors only after a thorough vetting of the proposals."

"GoAir is the only airline 100 per cent equity-funded by the promoter family and hence we will not take a decision in a hurry," Wadia said.

On plans to enhance fleet strength, Wadia said GoAir, which presently has five aircraft, would enhance it to 18 by end-December 2008 and to 34 by 2011.

The company has already finalised sale and lease deals for 10 aircraft which would be inducted into the fleet from October this year, he said. The planes would be added through a combination of sale and lease back (SLB) and outright purchases.

"As we get closer to our IPO date in FY 09, we will purchase aircraft as we need to build up our assets," Wadia said. The company will be adopting a conservative growth strategy till then, he said.

In the meantime, GoAir, over the last four quarters, has clocked a revenue growth of 60 per cent, a passenger growth of 50 per cent and a load factor growth of 17 per cent.