Home / Companies / Company Results /  GoFirst sees revenue go up 53.6% in September quarter
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NEW DELHI : GoFirst, the airline operated by the Wadia Group, reported a 53.6% annual rise in its total revenue for the September quarter, at 752.86 crore, on the back of a revival in domestic air passenger traffic.

The airline’s passenger revenue during the September quarter was 555.85 crore, a 76% rise from the same period of the previous year.

“The initiatives and strategic steps taken by the company to bring down costs on a sustainable basis has led to positive Ebitdar for the six-month period ended 30 September 2021 and for Q2, July to September 2021, the company has reported an Ebitdar of 13.9% at 104.64 crore," a person with direct knowledge of the matter said.

Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (Ebitdar) is a metric used to measure a company’s financial performance.

“The efforts by the company to rationalize and control costs through structural changes has not only resulted in realigning its cost structure to the ultra-low-cost carrier (ULCC) but has also ensured that these changes and savings are strategic, structural, and sustainable, and this has resulted in the company turning cash positive even after payment of all costs, including lease rentals since 21 September on a month-on-month basis," the person cited above said, requesting anonymity.

The airline, however, reported a loss of 923 crore during April-September 2021 period though its total revenue rose by 105% to `1,202.90 crore during the same period.

India’s air passenger traffic has seen significant growth since June, with the easing of restrictions imposed to contain the spread of coronavirus following a steady decline in fresh covid-19 cases, giving people more confidence to travel.

Domestic air passenger traffic rose 67% year-on-year and 24% sequentially to about 8.8 million passengers in October, according to a recent report by credit rating agency Icra.

The airline had rebranded itself from no-frills carrier GoAir to GoFirst in May ahead of its proposed initial public offering (IPO), which is likely to be concluded in December. The rebranding was aimed at operating the carrier in a ULCC model, which would give it a competitive advantage over its peers, the airline had said in May.

Mint had in August reported that GoAir’s IPO, which was put on hold in June by the Securities and Exchange Board of India, had received the green signal from the markets regulator for its initial share sale worth 3,600 crore.

The budget airline also plans to raise up to 1,500 crore through a preferential placement of shares prior to the IPO, according to the prospectus.

The net proceeds will be utilized to mainly repay debt. Of the 3,600 crore the airline hopes to raise, it plans to utilize 2,015.81 crore for payment and scheduled repayment of outstanding borrowings, 279.26 crore for replacement of letter of credits with cash deposits for securing lease rental payments and aircraft maintenance from leasing companies, and 254.93 crore to repay dues to Indian Oil Corp. Ltd towards jet fuel purchases, it said in the draft prospectus.

“GoFirst has taken delivery of six new Airbus A320 neo aircraft in the last seven months from April 2021. The lease rentals for these newly inducted aircraft are substantially better than pre-covid times, and at an aircraft cost, that is substantially lower than pre-covid cost," the person said.

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