Indian low-cost carrier GoAir has rejected a proposal to order another 20 Airbus A320s and has decided to wait for prices to go down before buying more aircraft.
Mumbai-based GoAir currently operates six A320s, four older model leased aircraft and two from the 20-aircraft order it placed in 2006. GoAir CEO Edgardo Badiali says the carrier had been in talks with Airbus for several months over ordering 20 more A320s for delivery after the last aircraft in the original order is delivered in 2011, but GoAir recently decided against pursuing the proposed deal.
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“We were in discussions but we’ve decided to wait,” Badiali said in an interview with ATI sister publication Airline Business Magazine.
He adds Airbus was trying to persuade GoAir it needed to order more aircraft this year to keep up with competitors such as Indigo, which in 2005 ordered 100 A320s, and to secure delivery slots for the first half of next decade.
But Badiali says the current price is too high and he is confident pre-2013 delivery slots will become available as other carriers realise they cannot take all the A320s they have ordered.
“Our thought is the price will come down and aircraft will become available before 2012 and 2013,” he says. “Our position is aircraft will come into the market at some point in time. It’s better than taking supplemental aircraft at this point.”
Badiali says GoAir will receive in June the third A320 from its 2006 order, which was initially included 10 aircraft plus 10 options and later expanded to include 20 firm aircraft. It is slated to take delivery of the remaining 17 A320s at a rate of five per year.
But Badiali says four of the new A320s to be delivered over the next 14 months will be used to replace GoAir’s four leased aircraft, which will be returned between June 2008 and June 2009 as their leases expire. Two of these aircraft have already been leased to Indonesian low-cost carrier Mandala, according to Badiali and Mandala chief executive Warwick Brady.
Badiali says GoAir is keen to replace the leased aircraft because they burn 5% to 7% more fuel than its new A320s. He says the carrier also wants to standardise its fleet around CFM56-powered A320s. Currently the leased aircraft are powered by the IAE V2500 while GoAir has selected the CFM56 for all the new aircraft it has ordered.
According to ATI’s ACAS database, GoAir’s four leased aircraft are owned by GECAS. Two were built in 1995 and two in 2001.
While GoAir is not looking to acquire more new aircraft, Badiali says it will consider short-term leases to provide additional capacity during the peak winter season.
India prohibits wet-leasing but Badiali says GoAir previously has structured a deal with Spanish carrier Iberworld in which it takes an A320s for the winter and registers it in India for the short duration of the lease.
Source: Air Transport Intelligence news
Source: FlightGlobal.com
