GoAir, the budget airline of the Wadia Group, has gone into high altitude by placing an order for 72 Airbus aircraft worth about Rs 32,400 crore ($ 7.2 billion). "We are evaluating various fund-raising options. It will be a combination of debt and equity,” Jeh Wadia, the airline’s managing director, told a press meet on June 16, 2011. "Let me tell you, these 72 planes are confirmed orders, not options,” he said. The plan is to tap business in tier II and tier III cities, he added.
Managing director Jeh Wadia: expanding the GoAir fleet
GoAir will start inducting 15 planes every year, beginning 2015, thus adding about 2,700 seats annually till 2020. Over the coming two years, the airline will get delivery of the 20 aircraft it had ordered about four years ago. Like most low-cost airlines, GoAir has a uniform fleet of Airbus 320s, though the latest order will see the upgraded version (180-seater Airbus 320 NEO) join the fleet. After suffering losses, the airline has reportedly made a profit over the last two years on stronger passenger demand. "Profit after tax was up by seven percent, operating margin up by 15.7 percent and operating profit up by 13.7 percent,” stated Wadia, though he did not supply detailed numbers. The airline recently appointed a new chief executive officer, Giorgio De Roni, who was earlier the head of a private Italian airline. "Now we are looking at a new growth trajectory with aggressive expansion in terms of fleet and routes,” Wadia declared. "We are focusing on clean aircraft, the cleanest bathroom and smiling crew. Cost reduction measures are ongoing. We are also trying to improve the turnaround time of flights,” Wadia was quoted in Mint, June 17. The carrier is also considering introducing more red-eye (early morning) flights. "Our idea is also to target bus and train travelers by offering lower fares,” he said. Currently, GoAir is reportedly the smallest of the budget airlines, with a fleet of only 10 aircraft.
In May, the Bombay Dyeing and Manufacturing Company Limited announced that its net profit for the last quarter of the financial year ended March 31, 2011 was Rs 81.95 crore, an increase of 75.10 percent compared to the same period last fiscal. Net sales were Rs 619.21 crore, compared to Rs 527.55 crore in the equivalent period last year. The company has recommended a dividend of Rs 3.50 per share of Rs 10 each for the year ended March 31, 2011.
Meanwhile, Wadia Group chairman Nusli Wadia continues to be embroiled in a lengthy legal war with property developer G. L. Raheja over a valuable 600-acre plot in Malad (W). In June 2011, a division bench of the Bombay High Court admitted an appeal by Raheja challenging Wadia’s right to continue as administrator of the estate of Eduljee Framroze Dinshaw and his successor Bachoobai Woronzow. In December last year judge Roshan Dalvi had upheld Wadia’s right to continue as administrator.
In 1970, Dinshaw had died in New York leaving a will which gave the land to his sister Bachoobai who was appointed executrix. On Bachoobai’s death, as per the will, the property was to go to two US-based charities — the Salvation Army and the American Society for the Prevention of Cruelty to Animals. In 1972, Bachoobai gave a power of attorney to Wadia, appointing him the administrator of her property in India.
In 1995 Wadia entered into an agreement with Ferani Hotels Private Limited (a Raheja company), wherein Raheja was to develop the land, with Wadia receiving a 12 percent share from sales. Bachoobai died in the early years of the new millennium and after some wrangling, the US charities withdrew. Wadia later filed a case against Raheja seeking termination of their agreement. Senior counsel Navroz Seervai and others appeared for Wadia in the High Court, while senior counsel from Delhi Abhishek Singhvi and counsel from Bharucha and Partners appeared for Ferani Hotels.