New Delhi: Privately held GoAir and its larger peer SpiceJet are not in talks for a merger, the smaller carrier’s chief executive said on Wednesday, terming such media reports as speculation and rumours.
A recent report in the Business Standard newspaper said GoAir was in talks to merge with or to sell a stake to Spicejet.
“No. Not in my knowledge, in any case,” Edgardo Badiali told reporters at a news conference, when asked if there were talks between the two budget carriers for a merger.
SpiceJet shares briefly spiked up to Rs13.90 after the comments, before closing flat on the day at Rs13.54. The broader market was up 2.08%.
Industry executives, including SpiceJet’s chief and Badiali, have said there would be consolidation amongst the bleeding carriers, as they look to cut costs and make profits.
Last year, arch-rivals Jet Airways and Kingfisher Airlines joined hands to cut costs by sharing codes and crew and by joint management of fuel.
“It’s a small village, India and the aviation industry. Every time there is somebody who is talking to somebody, there is rumour of a merger or alliance,” Badiali said.
Badiali said a strategic investor was an opportunity, but a decision on that would be taken by the promoters and the shareholders of GoAir.
GoAir is part of the Wadia group, which also has textile firm Bombay Dyeing and Manufacturing and India’s top biscuit maker Britannia Industries in its stable.
“A strategic investor is always an opportunity (but it) depends always on which conditions,” Badiali said. “You can never exclude anything. You would be also stupid to exclude anything.”
GoAir plans to take its fleet to 20 by 2012, up from six currently. It has not yet tied up funding plans for 10 planes which will be delivered between 2010 and 2012, Badiali said.
The carrier would also break even in the fiscal year to March 2010, he said, helped by new routes, better traffic and ticket sales.