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Last month, we told you how the Indian Civil aviation industry was all set to bid <a href="http://www.businessinsider.in/Civil-aviation-industry-to-say-goodbye-to-the-5/20-formula/articleshow/50282911.cms">goodbye to the 5/20 formula</a>. However, looks like there might be some opposition regarding this change. 
 Apparently, <keyword id="1542889" type="COMPANY" weightage="100" keywordseo="The-Wadia-Group">the Wadia group</keyword> is opposing the decision of the <keyword id="58151" type="ORGANIZATION" weightage="100" keywordseo="civil-aviation-ministry">civil aviation ministry</keyword> to dismantle the 'five years and 20 aircraft' (5/20) norm for domestic carriers to be able to fly international. 
 The promoters of <keyword id="6356167" type="COMPANY" weightage="100" keywordseo="GoAir">GoAir</keyword>, <keyword id="6500654" type="PERSON" weightage="100" keywordseo="Nusli-Wadia">Nusli Wadia</keyword> and <keyword id="145370" type="PERSON" weightage="100" keywordseo="Jeh-Wadia">Jeh Wadia</keyword>, were part of a delegation that met <keyword id="210147" type="PERSON" weightage="100" keywordseo="Mahesh-Sharma">Mahesh Sharma</keyword>, the Minister of State for Civil Aviation on Tuesday. The delegation was as part of a Federation of Indian Airlines (FIA) team and SpiceJet Chairman Ajay Singh was also present for the meeting. 
 
As per ET sources, the Wadias argued before the minister that a lot of foreign nations respect their domestic airlines and give them priority over foreign carriers, and this being a new government should know the expectations that people have. 
 As per the existing guidelines, only those airlines that have been flying within India for five years or have more than 20 aircraft are allowed to fly on international routes, but the civil aviation ministry is considering scrapping the rule, which would benefit two Tata Group-promoted airline companies - <keyword id="2467342" type="UNKNOWN" weightage="100" keywordseo="Vistara">Vistara</keyword> and AirAsia India. However, Nusli Wadia-owned GoAir, IndiGo and SpiceJet are more likely to benefit if the rule stays as is. Therefore, even though the Tatas and the Wadias have been close allies for a long time, this issue is seeing them standing on opposite sides. 
 
<a href="https://c2.staticflickr.com/4/3388/3638338830_637f68d63b_b.jpg">Image source</a>

The Wadias don’t want the 5/20 aviation rule to be scrapped, even if it means huge losses to close friends, the Tatas

Go-Air will have its first major expansion drive since its inception 10 years ago, under the able-leadership of its new CEO <keyword id="289256" type="PERSON" weightage="100" keywordseo="Wolfgang-Prock-Schauer">Wolfgang Prock-Schauer</keyword>. The Wadia Group-owned airline will receive the first of its 72 ordered aircraft early next year. That will increase its fleet size to 20, helping <keyword id="6356167" type="COMPANY" weightage="100" keywordseo="GoAir">GoAir</keyword> meet the requirement to fly international — five years' domestic flying experience and a fleet of at least 20 planes. 

	"Basically, the logic of this business (short-haul international travel) and customer needs are very similar to domestic travel. They all want reliable affordable transportation," Prock-Schauer told ET.
 

	He particularly sees an opportunity in the Gulf and surrounding markets in the East. "The flights are (on average) three hours, which is not very different from a flight to the south or Kolkata," he said. 
 

	GoAir operates a fleet of Airbus A320s, with which "you can do a lot of things", Prock-Schauer, 58, said. He has been in this industry for three-and-a-half decades and had headed different airlines in different countries, including Jet Airways, British Midland Airways and Air Berlin. He was also chairman, management board at the Star Alliance, the world's largest airline group, in 2002 and 2003.
 

	"Prock-Schauer is extremely well networked and brings a lot of experience on international operations and alliances to the table,"said KG Vishwanath, Jet's ex-vice president for commercial strategy and investor relations.
 

	Prock-Schauer is, however, quick to clarify that GoAir's focus will remain domestic operations and profitability. "In whichever market you are, you must be a viable, strong player. If you spread over too many markets, you are not strong...simplicity is the key thing," he said. 
 GoAir plans to more than double the number of destinations in its network and increase daily flights and annual passenger count by about four times in the next five years, its managing director, <keyword id="145370" type="PERSON" weightage="100" keywordseo="Jeh-Wadia">Jeh Wadia</keyword>, had said in a recent interview. He had also said flying international is more about "glamour" than anything else. 

	Despite, or perhaps due to its limited ambitions, GoAir has remained profitable in the last few years. Prock-Schauer is keen to keep it that way through its expansion. 
 

	The Austrian has been somewhat of a scale-up expert. In his first job with Austrian Airlines, he oversaw its expansion from 20 planes to 100. During his six year-plus stint at Jet Airways, he presided over its fleet expansion from 40 planes to more than a hundred, its first international flights to Colombo and later to London, its public listing and acquisition of Air Sahara.
 

	Prock-Schauer crafted a lot of Jet's codeshare agreements with international airlines. Vishwanath recalls a time in 2005-06 when the airline added 20 planes within a span of 18 months. He, along with Jet's former executive director Saroj Datta, made sure the fleet expansion was backed by rapid network enhancement plans, adequate recruitment of crew and engineering support.
 

	Since leaving Jet in 2009, he headed restructuring programmes at British Midlands and Air Berlin. 

	He also headed two low-cost airlines — Bmibaby, a subsidiary of BMI (British Midlands) and Niki, a subsidiary of Air Berlin.
 

	"I have seen it from both sides. I know both business models," Prock-Schauer said.
 

	"While running Niki, I realised how much simpler it (the low-cost model) is and how many more opportunities you have if you are low -cost," he said. "Full-service carriers are vulnerable. Everyone goes for price and the airline which has the lowest cost base is the winner."
 
 

	Prock-Schauer agrees with Wadia that it's important to be cautious when scaling up. He has seen the perils of mindless expansion from close quarters more than once.
 

	Jet acquired Sahara in 2007. The airline came with a huge debt and has remained a loss-making unit, impacting its parent's finances.
 

	BMI, which Prock-Schauer headed between 2009 and 2012, acquired several airlines and itself changed hands twice in complex deals—to Lufthansa and International Airlines Group that owns British Airways—before it shut shop in 2012 due to growing losses and unsustainable finances.
 

	"I think organic growth is the best growth for an airline," Prock-Schauer said, admitting it's a lesson he learnt from his many years of experience.

	Prock-Schauer quit Air Berlin at the end of February 2015 and joined GoAir in end May.
 "I believe in the Indian market. You can see the <keyword id="6356076" type="UNKNOWN" weightage="80" keywordseo="indian-economy">Indian economy</keyword> is picking up," he said. 

	His predecessor, Giorgio De Roni, quit GoAir in March on health grounds. The airline's chief operating officer, Tim Jordan, too, has gone on sick leave after a couple of months in office.
 

	In Wadia's interview, he had said expats sometimes find it difficult to adjust to Indian conditions. Prock-Schauer wouldn't have that problem, having fond memories of Mumbai from his seven year stay in the city. A colleague at GoAir and Vishwanath were unanimous in counting Prock-Schauer's approachability to all employees as one of his key attributes. 
 In September 2009, when Jet faced one of its worst cabin crew and pilot strike and a fierce standoff with the management, Prock-Schauer was one of the key spokespersons for the employees, convincing chairman <keyword id="122732" type="PERSON" weightage="20" keywordseo="Naresh-Goyal">Naresh Goyal</keyword> to consider their point of view. He quit later that year. 
	 
	(image credits: deccanchronicle)

CEO Prock-Schauer envision to take GoAir to new heights

Mumbai, Mar 26 () Wadia Group aviation venture GoAir has written to civil aviation ministry and sector watchdog DGCA, offering its grounded aircraft fleet, cockpit and cabin crew, and airport staff for carrying out emergency services and repatriation of citizens. Regular passenger air services are suspended in the country till April 14 amid the 21-day nationwide lockdown, which is in place from Tuesday mid-night, as part of the larger efforts of the government to contain COVID-19 (coronavirus), which has wreaked havoc in several developed economies. This has left the entire fleet of over 650 planes with the domestic air operators grounded, along with huge manpower with no work. Moreover, stringent border control measures by various countries, including India, to deal with the unprecedented situation has left thousands of people stuck in different territories, and governments are operating special flights to evacuate their stranded citizens. GoAir has reached out to the civil aviation ministry and the Directorate General of Civil Aviation (DGCA) and offered its services in the wake of a complete lockdown across the nation, the airline said in a statement to on Thursday. The budget carrier's proposal came a day after market leader IndiGo made a similar offer to the government. "Everyone around the world is facing an unprecedented challenge as we try and battle this global pandemic," it said. The Mumbai-headquartered passenger air carrier has a workforce of around 5,500 personnel to operate its fleet of 56 planes. "GoAir airline is fully supportive of the initiatives announced by Prime Minister. In fact, we were the only airline to respond to Prime Minister's call to observe Janata Curfew on March 22 by suspending all our flights on that day. With our state-of-the-art fleet of Airbus A320 aircraft, GoAir is on stand-by for any flight that the government may want us to fly," GoAir Managing Director Jeh Wadia said. The airline, in the letter, has proposed that it can help in services such as ship cargo on behalf of the government, essential services such as medicines, food grains, ship manpower who would carry out emergency services: doctors, nurses, para medics, relief workers. Besides it can also help in repatriation of stranded Indian citizens and expats to each other's countries as well as bring back people stuck in various states within the country to their respective places. IAS RVK

GoAir offers govt its aircraft, crew for emergency services

Mumbai, May 4 () Budget carrier GoAir is seeking financial support from the government amid the coronavirus pandemic and has paid salaries to some of its employees on deferred basis, according to a communication. In the communication to the company's employees on Sunday, Wadia Group Chairman Nusli Wadia and GoAir Managing Director Jeh Wadia also said the carrier remains focussed to restart operations and resume flights as soon as the lockdown is lifted with a full recovery of its network anticipated within a few months."The world over, airlines are getting substantial financial support from governments to tide over this unprecedented crisis (coronavirus pandemic), primarily to enable them to meet employee requirements, and also to sustain and restart operations and maintain the viability and structure of their balance sheets," GoAir said in the communication. These airlines have also been given substantial support from banking systems with the help provided by federal banks, it added."We continue to vigorously pursue similar options with our government so that we can, most importantly, improve the position of our employees and also the sustainability of our airline," it said. GoAir said the airline has been requesting the Indian banking system for financial support but they have not yet reached a conclusion on how they should financially support the airlines despite various advisories from the RBI, it said.The airline had very little revenue in the first 17 to 24 days of March and zero revenue thereafter, GoAir said adding that it also has to meet all its expenses and liabilities toward its stakeholders such as lessors, suppliers of fuel and engineering, airports and other major expenses. The nationwide lockdown to curb the COVID-19 pandemic was imposed with effect from March 25 and commercial flight operations have remained suspended since then. "Despite the lack of government support, GoAir released full salaries to about 2,500 less fortunate employees, equivalent to 40 per cent our workforce, with the remaining employees getting paid on a graded and deferred basis," the company said.With no inflow of cash, which the company anticipates will continue through the end of May, and with no support forthcoming from either the government or the banking system, "we were left with no alternative but to make the unfortunate and sad decision to pay the March earned salaries over March and April," the airline added.GoAir said it has closed the sale of all tickets on flights operating through May 31 upon instructions from the government, adding," we do not expect to resume commercial flying prior to June 1, but we are in continuous touch with the Civil Aviation Ministry and are monitoring the situation closely."The airline also said it has been in continuous touch over the past several weeks with the aviation ministry and the government for financial assistance and structural changes, both fiscal and non-fiscal, but so far no concrete measures have been forthcoming."However, our discussion with lessors, partners and suppliers is progressing with most industry related playersbeing understanding and willing to work with us to try to find suitable solutions," it added."With the exception of 2,500 employees, who are the least fortunate amongst us in the GoAir family, we were also forced to place a substantial portion of our employees on temporary leave without pay. The limitations on our resources are not of our own making and the sacrifices we are imposing on you are sadly beyond our control," the airline said.GoAir CEO has taken a 50 per cent pay cut and voluntarily deferred most of his balance compensation, and the senior management too have taken substantial pay cuts and have also deferred a portion of their compensation. It also said in preparation to resume operations the airline has reviewed and is executing all the requirements related to health and safety in the context of the pandemic. IAS ANUANU

You Searched For "Jeh Wadia" and got 4 results

The Wadias don’t want the 5/20 aviation rule to be scrapped, even if it means huge losses to close friends, the Tatas

BI India Bureau

CEO Prock-Schauer envision to take GoAir to new heights

BI India Bureau

GoAir offers govt its aircraft, crew for emergency services

PTI

GoAir pitches for govt support to tide over COVID-19 crisis

PTI

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