MAX KINGSLEY-JONES / LONDON STANSTED
No-frills airline considers bucking the low-cost trend and opting for a mix of aircraft sizes as it plans major expansion
Low fare airline Go is close to finalising a major fleet expansion decision which is likely to net a huge order for Airbus or Boeing. The airline is also mulling whether to buck the low-cost trend and order a mix of aircraft capacities rather than concentrating on a single size.
The London Stansted-based carrier, which until last year was owned by British Airways, is rapidly expanding its fleet amid Europe's boom in no-frills airlines. It has already established a second hub at Bristol and is poised to launch services from a new base at East Midlands Airport.
Go's Stansted neighbour Ryanair recently concluded a massive 100 aircraft deal with Boeing for 737-800s, while rival EasyJet is in the final throes of its own fleet expansion campaign, with Airbus and Boeing vying for a 75 aircraft order.
Chief operating officer Ed Winter says that Go aims to expand at an annual compound rate of 30%, which will see its fleet grow from the mid-2002 tally of 27 Boeing 737-300s to around 80 aircraft in four years' time.
"We have been in a lengthy evaluation of the Airbus and Boeing narrowbodies, and we've just finished the operating cost analysis," Winter says. "If we are to start taking aircraft from next spring then we will have to place an order by early summer." An order for up to 80 aircraft for delivery through to 2006 is envisaged, plus additional positions beyond that date.
Although Go's present all-Boeing fleet suggests the US manufacturer could have the advantage, Winter stresses that he "doesn't see any reason why Airbus shouldn't be successful" in the campaign and says that the European manufacturer is working hard to achieve the cost per seat Go requires.
While the evaluation of new aircraft has been running for several years, Winter says that the fall in lease rates and values since 11 September has meant that the acquisition of used aircraft is also now being considered to underwrite its expansion.
Studies of new aircraft have centred on the Airbus A319, equipped with four overwing exits to boost capacity to 150 passengers, and the similarly sized Boeing 737-700. However, Winter says that Go has identified some markets where a larger aircraft could be of benefit, and is evaluating whether to also order a bigger model - such as the 180/220 seat A320/A321 or 189/200 seat 737-800/900X.
If the airline does split the sizes of its aircraft, it would constitute a marked departure from the general policy of low-cost airlines, such as EasyJet and Southwest, which only operate one size of aircraft. Even Ryanair, which has 737-200s and-800s in service, is planningto operate only the larger model in the longer term.
Winter says Go is studying various ways of funding the airline's expansion, including an initial public offering towards the end of this year or early next.
Source: Flight International
