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Shares of Go Air, the Wadia Group-controlled airline, may soon take flight at the bourses as the airline gears up for Rs 3,600 crore initial public offer (IPO). The budget airline has rebranded itself to become an “ultra-low-cost” airline and plans to raise funds amid the second wave of Covid-19 that has decimated travel demand.
The move, analysts believe, may re-rate other Group firms as the airline won’t be dependent on sister firms for line of credit. Wadia Group firms have been underperforming at the bourses for quite some time now. So far in the calendar year 2021.
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The rebranding also comes at a time when a large chunk of the air passenger traffic has been wiped out over the last fortnight by the second wave of covid-19 infections.
An ultra-low-cost carrier (ULCC) is different from a low-cost carrier (LCC) as they typically operate different business models with unbundled fares which result in cheaper ticket prices.
For instance, on a ULCC, passengers have to pay extra for baggage, while a selection of seats and food are subject to an additional fee. ULCCs also have fewer amenities than simple low-cost carriers, and therefore have a greater range of add-ons for a fee. Most Indian airlines like IndiGo, SpiceJet, and AirAsia India operate on a low-cost model.
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