New airport fee illogical, will hurt sector: Go Air boss

Giorgio De Roni, chief executive officer of Wadias-promoted low cost carrier Go Air, began his career in the aviation business in 1983 as a check-in agent at an airport. Since then he has worked in various roles across sales, strategy, fleet development, revenue management in different carriers, before taking over the reins at Go Air in May last year. In a free-wheeling chat with moneycontrol.com, De Roni spoke about the targets for his company and on the issues affecting the sector in general.

Go Air aims to fly five million passengers this financial year, nearly 40% more than what it did in FY12. Growth in domestic passenger traffic has been anemic in the last few months, averaging less than 10%. But De Roni is confident is that his airlines strategy of providing value for money to fliers, better service, punctuality and a focus on business travellers in the small and medium enterprise segment, should help achieve the target. Also, profitability, rather than market share will be the focus of the carrier, which has 13 aircraft currently, and will add three more this financial year.

"Till February, Go Air was the smallest player. That changed in March, and we are no longer the smallest. But I am not interested in market share (7.5% in March). I want to deliver sustainable profits to our shareholders. Only if we are profitable can we grow," De Roni said.

He was non-committal on when the airline would turn profitable.
"I am confident of delivering good numbers for this financial year, based on the results we achieved in the last quarter of FY12. Load factor has been consistently increasing (83% in February, 81% in March). We now have a critical mass, a good product that appeals to business travelers. We hope to benefit from a better mix of business fliers, which will help us earn a higher fare," De Roni said.

Go Air is not in a hurry to add more routes, but would instead concentrate on strengthening its presence on existing routes like Jammu & Kashmir and the North East.

But there challenges aplenty for the sector in general. Rising aviation turbine fuel price, a weak rupee (which makes imports of jet fuel costlier) and cut throat pricing strategies have severely hurt profitability. Of late, there has been some relief on airfare pricing though.

"In the last few months, there has been some sanity in the pricing environment. Carriers are no longer looking market share and are now focusing on sustainable growth in the medium to long term," he said.

Airfares have been steady inching up over the past few months as the cash-strapped Kingfisher Airlines has reduced its flights drastically.

But De Roni chooses to sidestep this point, saying he does not want to comment on competitors and their strategy.