Budget carrier GoAir, owned by the Wadia family, said it will stop flying some routes and return two aircraft as it seeks to narrow losses.
GoAir will stop flying to at least two of the 13 cities it services now, Jeh Wadia, the airline’s managing director, said in Mumbai. The airline will return at least two planes that are on lease to reduce capacity due to the traditional decline in summer travel, Wadia said.
Indian low-fare carriers are cutting back on unprofitable routes to reduce losses arising from growing competition among the five airlines that have started in the past three years. GoAir and other Indian carriers may post $250 million (Rs1,100 crore) this year in losses as they sell tickets below cost, according to the Centre for Asia Pacific Aviation, an industry consultant.
“In this dog-eat-dog competitive world, it’s better not to add capacity and instead consolidate,” Wadia said. “The more planes you bring in now, the more losses you make.”
Unprofitable GoAir gives away some tickets for free to compete with airlines such as Air Deccan and SpiceJet.
GoAir is the second low-fare carrier to cut back on routes to reduce loses. Bangalore-based Air Deccan, the nation’s biggest low-fare airline, cut some routes last year and made its first profit in the quarter ended 31 December.
“Unless there is a turn in the industry, losses will increase with this below-cost pricing,” Wadia said. “I think the one who has spread thin the most will die. Therefore, we don’t want to expand any more.”
The Wadias, who are into biscuits and textiles, started GoAir in November 2005. It has flown 1.5 million passengers since.