GoAir has renamed itself as ‘GoFirst’ as it looks to become India’s first Ultra Low-Cost Carrier (ULCC). The renaming announcement comes a day before the airline began its process to launch an IPO and raise fresh funds.
GoAir yesterday made a announcement in major newspapers in India regarding its new name – GoFirst. The name change will also come with a new livery which can be seen below.
All of these changes have been made as GoAir makes a shift from Low-cost to Ultra Low-Cost carrier. The man leading the transformation of GoAir is none other than Ben Baldanza, the CEO who led Spirit Airlines to its successful ULCC shift.
If GoAir follows Spirit Airlines, then you can expect everything from hand luggage, seat bookings to printed boarding passes to become paid.
News broke earlier today that GoAir has formally filed to hold an Initial Public Offering (IPO). Presently, the airline is owned by the Wadia Group. 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.
For GoFirst, the IPO will be a much needed capital injection which will eventually reduce dependence on the Wadia Group. The carrier’s debt total has risen dramatically due to the crisis.
What is a ULCC?
Most airlines in India (Indigo, SpiceJet, Air Asia India, and erstwhile GoAir) are Low-cost carriers. Most of the time, in the case of Indian aviation market, the cost of a ticket of a LCC airline from Point A to point B is almost the same as that of a Full-service carrier (FSC).
In the case of a ULCC, you only pay for a seat when you buy a ticket, and everything else is priced separately. You pay for seat selection, baggage and so on.
However, Baldanza has different ideas for Go Air in this case. ETPrime (Paywall) talked to him, and here is what he said for Go Air:
The ULCC model is not about charging for everything…. every airline charges for everything. We will be able to be a profitable airline and make good money on those very low fares, by increasing our ancillary revenue by providing an option of bundling hotels or an adventure with their tickets. Go Air has been profitable since 2010, until the advent of the Covid, and you know that is where we draw a trend in terms of, you know, always being a profitable airline.
The Indian domestic market is dominated by low-cost carriers offering the lowest prices possible. 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.
We will see in the near-future how GoFirst turns out to be and what it has in the store for the market.
Featured image by Deccan Herald
What do you think of GoFirst and the plans to turn into a ULCC? Let me know in the comments section below.