Private Cos Turn Their Attention to Regional Flights
Prime Minister Narendra Modi recently inaugurated Air Odisha's flight which will connect Ahmedabad with Diu
With the aim to empower regional flights and greater connectivity for smaller cities of India, the government of India had brought out the UDAN (Ude Desh ka Aam Naagrik) scheme.
Launched in April 2017, the scheme is divided into two components. While in the first part, the government looked at developing new regional airports and also enhancing the existing ones, in the second component, the idea was to add new flight routes for more than 100 underserved and unserved airports in smaller towns.
With Air Odisha beginning operations, we take a look at how the regional flight industry is growing with the influx of private airlines.
Modi Flags Off the First Flight
Prime Minister Narendra Modi recently inaugurated Air Odisha’s flight which will connect Ahmedabad with Diu. Modi spoke about how this connectivity will cut travel time and boost tourism in the region. Last March, Air Odisha had received approvals to operate under 50 routes to foster regional connectivity.
As the aviation ministry looks at increasing the number of routes in which these airlines will operate, it also expects to collect INR 300 crore from the scheme per year. According to reports, India is already the third-largest aviation market only behind the US and China, with a growth rate of 15 per cent. Currently, the country has 394 unserved airports and 16 underserved airports.
Private Players Rush to the Scene
Numerous private players have invested in the regional airline space. Ahmedabad-based GSEC Aviation and Monarch Networth capital have taken over Air Deccan which was promoted by GR Gopinath. Jointly operating under a new company called GSEC Monarch Aviation, they have also bought a majority stake in Air Odisha. Interestingly, GSEC Aviation is owned by Rakesh Ramanlal Shah who is the brother-in-law of Gautam Adani, the billionaire chairman of Adani Group.
Meanwhile, Mahindra Aerospace has also entered into a partnership with the Canada-based Viking Air to develop regional air transport solutions. Regional air connectivity in India is looking at smaller airplanes, and thus the partnership fits well. While the Canadian company manufactures Twin Otter, a 19-passenger aircraft, Mahindra is known to build Mahindra Airvan 8 (an eight-seater aircraft) and also Mahindra Airvan 10 (a 10-seater).
Under the UDAN scheme, over 25 additional regional air routes under were given to existing private players including IndiGo and Jet Airways. The frailing airlines which have been picking up speed, SpiceJet too has picked up 20 additional routes and has already launched its fourth regional flight. The three airlines bid for these regional routes and won the same from the aviation ministry.
Can They Really Fly?
With the rising fuel costs along with tough competition, what remains to be seen is how many of these flights will actually take off. History of regional airlines in India hasn’t set a pretty picture. Air Costa, which specifically looks at operating in South India, interested many when it was launched, but soon lost its popularity. In fact, the airline which is owned by LEPL group is now struggling to raise funds from investors.
Another regional carrier line Air Pegasus with a 66-seat aeroplane failed to operate for more than a year because of financial difficulties.
In the business of news for 5 years now. Making my way across India thanks to my career. A media graduate from Symbiosis, Pune, I have earlier worked with Deccan Chronicle (South India's leading English daily), T-Hub (India's largest incubator) and Anthill Ventures (a speed-scaling platform).
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