Financial basis

GoFirst sees revenue increase 53.6% in September quarter

NEW DELHI : GoFirst, the airline operated by the Wadia Group, reported a 53.6% annual increase in total revenue for the September quarter, to ??752.86 crore, following a resumption of domestic passenger air traffic.

The airline’s passenger revenues in the September quarter were ??555.85 crore, an increase of 76% over the same period of the previous year.

“The initiatives and strategic measures taken by the company to reduce costs in a sustainable manner led to a positive EBITDA for the six-month period ended September 30, 2021 and for the second quarter of July to September 2021, the company announced. an Ebitdar of 13.9. % To ??104.64 crore, ”said a person with first-hand knowledge of the matter.

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

“The company’s efforts to rationalize and control costs through structural changes have not only realigned its cost structure with the Ultra Low Cost Carrier (ULCC), but have also ensured that these changes and savings are strategic, structural and sustainable. , and this has allowed the company to become a positive cash flow even after paying all costs, including rents since September 21 on a monthly basis, “said the person cited above, under the guise of anonymity.

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

Air passenger traffic in India has seen significant growth since June, with restrictions being eased to contain the spread of the coronavirus following a steady decline in new cases of covid-19, giving people more confidence for traveling.

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

The airline renamed itself from no-frills carrier GoAir to GoFirst in May ahead of its initial public offering (IPO), which is expected to close in December. The rebranding was aimed at operating the carrier in a ULCC model, which would give it a competitive edge over its peers, the airline said in May.

mint reported in August that the IPO of GoAir, which was suspended in June by the Securities and Exchange Board of India, had received a green signal from the market regulator for its initial sale of shares worth ??3,600 crores.

The low-cost airline also plans to increase up to ??1,500 crore thanks to a preferential placement of shares before the IPO, according to the prospectus.

The net proceeds will mainly be used to repay debt. Of ??3,600 crore that the airline hopes to increase, it plans to use ??2,015.81 crore for the payment and scheduled repayment of outstanding loans, ??279.26 crore for replacing letters of credit with cash deposits to secure lease payments and aircraft maintenance from leasing companies, and ??254.93 crore to reimburse contributions to Indian Oil Corp. Ltd for purchases of jet fuel, he said in the draft prospectus.

“GoFirst has taken delivery of six new Airbus A320 neo in the past seven months from April 2021. The rentals of these newly inducted aircraft are significantly better than before the pre-covid period, and at a cost of aircraft significantly lower than the pre-covid cost, ”the person said.

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