Indian budget carrier GoAir has renamed itself as Go First, as it looks to become the country’s first ultra-low-cost carrier. The name change also comes a day before the airline began the process to go public and raise fresh funds. Let’s find out more about Go First and its business strategy.
GoAir made a splash yesterday when it put out ads in major Indian newspapers announcing its new name: Go First. The branding change also comes with a new livery, which will see a sunrise-themed blue tailfin. All of these changes have been made to mark GoAir’s shift from a low-cost to ultra-low-cost carrier (ULCC).
But what exactly does that mean? As India’s first ULCC, Go First will have the chance to define the term in India. However, the focus will be heavy on reducing fares, offering point-to-point flights, and slashing services or making them paid for wherever possible.
The man leading the transformation of GoAir none other than Ben Baldanza, the CEO who led Spirit Airlines to its successful ULCC shift. If history is any indicator, expect everything from hand luggage, seat bookings, and printed boarding passes to become paid at Go First.
But why are these changes being made right now, amid India’s devastating second wave which has deeply hurt carriers?
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Eyes on the IPO
Earlier today, news broke that GoAir had formally filed to hold an IPO for the Wadia Group-owned airline. The carrier wants to raise as much as ₹3,600 crores ($490.2 million) by selling shares later this summer. The filing is the first step of many before GoAir is actually listed on the market.
The decision to go public has been rumored for months now and was recently confirmed by the carrier as well. However, the outlook on airlines has shifted in the last two months as India battles its second wave, which has sent passenger numbers plummeting once again.
For Go First, the IPO will be a much-needed capital injection and reduce dependence on the Wadia Group. The carrier’s debt total has risen dramatically due to the crisis, forcing it to restructure and take fresh loans in March.
The Indian domestic market is dominated by low-cost carriers offering the lowest prices possible. This dynamic has also resulted in a low-profit, high volume industry, with airlines perennially struggling. GoAir’s decision to rebrand as a ULCC and cut fares even more could force other airlines to respond in kind, triggering another price war.
However, it is yet to be seen what firm changes Go First will make to its operating model. Many elements of an ultra-low-cost carrier were adopted by Indian carriers years ago, leaving limited options for airlines to reduce airlines. Keep your eyes peeled for what the newly-christened Go First has in store for the market.
What do you think about Go First and its plans? Let us know in the comments!