Go First to go public

Wadia Group’s airline, Go First is the only airline in six years to file its papers for an initial public offering (IPO) of Rs 3,600 crores. The company announced a change in its name from GoAir to Go First in a press release on May 13, 2021. The airline’s press release on the rebranding included an announcement that they have embraced the Ultra Low Cost (ULC) approach. "Go First is determined to be part of the socioeconomic momentum to chart (young India’s) next phase of growth,” stated the communique. "With the youngest average fleet among Indian low-cost carriers… high-density seating, single aircraft type across its fleet, Go First is positioned to get ahead of its peer group by operating with ultra-low-cost.” The rebranded identity "is complete with contemporary graphics and a bolder, brighter blue.”
Kaushik Khona, chief executive officer stated that the rebranding "reflects our confidence in the brighter tomorrow.” Vice chairman, Ben Baldanza said, "The combinations of attractive airfares, a squeaky-clean flying experience, well sanitized flights and on time performance is what Go First is designed to deliver.” Baldanza, who has been advising the airline from 2018 was recently named GoAir’s non-executive vice chairman after Jeh Wadia stepped down in March this year (see "Management changes,” Business, Parsiana, April 21, 2021).
"We will be the most relevant airline for the customers who pay for tickets themselves,” said Baldanza in an interview with Business Standard (May 22, 2021). "What the ULC carrier model really means is that we will be focused on leisure and small business travelers, and not corporate customers. So, we will not fly a dozen times between Bombay and Delhi. We will fly a couple of trips a day between Bombay and Delhi. We will have lot more non-stop services between large, medium and small cities and very low fares...
"Over time we could have separate charges for things like baggage and lower the ticket price. It would be good for consumers if some of the rules are liberalized. However, we don’t feel constrained…Over the next six to 12 months, we will get back to some kind of normal. India as an economy has got enormous growth potential and Covid-19 may slow it down, but will not kill it. India has just 700 aircraft. Compare that to China’s 4,000. The aviation sector, however busy, is way too small. IndiGo in all probability cannot go from 60 % to 80 % but Go First can grow from 10 % to 20 %. So, I don’t think we are going to trim our order book,” for new planes.
According to a report in the Financial Express of May 17, Go First expects to add eight new aircraft in the fiscal year ending March 2022 and 14 in the next. The company noted this risk factor in its IPO filing: "Of the 56 aircraft we (have) on operating leases… all had fixed rate leases. While our current leases provide us with adequate protection against any volatility in (interest rates) we may enter into variable rate leases in the future which may expose us to interest rate volatility.”
According to the draft documents filed by the company, the brand "GoAir” and certain other registered trademarks are held by Go Holdings, of which Jeh, son of Group patriarch Nusli, owns 99% of the equity.
Go Holdings reportedly intends to take necessary steps and pursue legal options to establish its ownership over all the trademarks and domain names.
Quoting unnamed analysts, Livemint had noted in its report of May 17 that the success of the IPO "boils down to the backing of the promoters, which infused funds into the airline as recently as this month…This is likely to give prospective investors some comfort.” The report added: "It also helps that its per unit operating costs are lower than that of its (competitor) SpiceJet.”