You can either call them bravehearts or foolish. The three regional airlines in the country – Air Costa, Air Pegasus and TruJet – have been in the industry for up to two years and are fighting an uneven battle in an environment, where chances of survival are wafer thin.
The Vijayawada-based Air Costa is struggling to get its aircraft fleet right, but plans to start pan-India operations. While Air Pegasus, headquartered in Bengaluru, is bogged down by high costs, TruJet, backed by movie star Ram Charan and based in Hyderabad, is trying to make the best of its early days. They will hope that the new National Civil Aviation Policy (NCAP 2016), expected to be announced by the end of January, fuels their growth in the coming years.
These commuter airlines have fleets of small aircraft, connecting the country’s hinterland. These are places that do not generate enough traffic for the bigger players such as IndiGo and Air India. The new policy’s draft, which was announced in November, asks airports and governments to give concessions to the regional airlines.
But a recent report by the Centre for Asia Pacific Aviation (CAPA) paints a dismal picture of this industry segment. Despite a healthy load factor, the report says, these airlines are losing money and key personnel; and while debt is piling up, salaries are being paid in instalments.
Entrepreneurs though remain optimistic. “In the coming years, regional airlines will play a larger role. National carriers will be forced to tie-up with us and our cumulative revenues will be as big as theirs,” says Shyson Thomas, Managing Director and CEO of Air Pegasus, which started its operations last year.
The present civil aviation policy for regional airlines, which was announced in 2007, makes it easier for an entrepreneur to set up a regional airline. The paid up capital for regional airlines is ₹30 crore, compared with ₹50 crore for national carriers for employing five aircraft.
To Read the News in Full12/01/16 K Giriprakash/Business Line
The Vijayawada-based Air Costa is struggling to get its aircraft fleet right, but plans to start pan-India operations. While Air Pegasus, headquartered in Bengaluru, is bogged down by high costs, TruJet, backed by movie star Ram Charan and based in Hyderabad, is trying to make the best of its early days. They will hope that the new National Civil Aviation Policy (NCAP 2016), expected to be announced by the end of January, fuels their growth in the coming years.
These commuter airlines have fleets of small aircraft, connecting the country’s hinterland. These are places that do not generate enough traffic for the bigger players such as IndiGo and Air India. The new policy’s draft, which was announced in November, asks airports and governments to give concessions to the regional airlines.
But a recent report by the Centre for Asia Pacific Aviation (CAPA) paints a dismal picture of this industry segment. Despite a healthy load factor, the report says, these airlines are losing money and key personnel; and while debt is piling up, salaries are being paid in instalments.
Entrepreneurs though remain optimistic. “In the coming years, regional airlines will play a larger role. National carriers will be forced to tie-up with us and our cumulative revenues will be as big as theirs,” says Shyson Thomas, Managing Director and CEO of Air Pegasus, which started its operations last year.
The present civil aviation policy for regional airlines, which was announced in 2007, makes it easier for an entrepreneur to set up a regional airline. The paid up capital for regional airlines is ₹30 crore, compared with ₹50 crore for national carriers for employing five aircraft.
To Read the News in Full12/01/16 K Giriprakash/Business Line
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