While existing domestic airlines continue to bleed and are remain mired in debt, aviation professionals and investors are taking fresh bets in the sector by launching new airlines on regional and pan-India routes.
The first to take off will be Air Pegasus which is promoted by Banaglore-based ground handling firm Deccor Aviation. Air Pegasus managing director Shyson Thomas claims the airline will commence service from later this month on regional routes within South India. Other industry sources feel the airline may only start next month and the company is yet to receive a permit from the Directorate General of Civil Aviation.
Air Pegasus received a no objection certificate from the civil aviation ministry in 2012 but its plans got stuck due to difficulties in securing an aircraft on lease following shut down of Kingfisher Airlines. The airline has now taken on lease 70-seater ATR-72 and has tied up for two similar type aircraft. The airline will connect Bangalore with Thiruvanthapuram, Hubli, Chennai, Tuticorn and other cities in its initial phase.
Other start ups too are preparing for the launch. Air One, which runs air charter service, plans to finalise its aircraft leases by next month while Flyeasy has begun hiring pilots, engineers for its proposed fleet of Embraer jets. Flyeasy will be a regional airline with a base in Bangalore. Another start up airline Premier Airways headed by NRI engineer Umapathy Pinaghapani is slated to launch in next summer, according to a media report.
Air One and Premier Airways are amongst the six companies which received the NOC from civil aviation ministry earlier this year. Flyeasy (promoted by ABC Aviation & Training) received its clearance prior to 2014. In all 16 companies have been issued NOCs to start scheduled airlines between 2009 till now. Only two have started operations (Air Costa and AirAsia). Vistara too is awaiting for DGCA nod and is expected to launch service next month.
“We do not have start from scratch and so getting the permit should not be an issue for us. We have the experience of running a non scheduled operations,” said Air One promoter Alok Sharma and added that their airline would launch in 6-8 months.
Sharma headed Air Sahara before it was sold to Jet Airways and has roped in several of his airline colleagues in the charter company. He denies that Air One is backed by the Sahara group and insists it is an independent company.
Sharma says Air One will operate as a dual class full service airline with narrow body Boeing 737 or Airbus A320 and its main base will be Delhi. He added that aircraft leases will be finalised next month and the airline hopes to induct 20 planes in three years.
Industry sources point out that lessors do not have a surplus capacity of new aircraft and still view India with some risk following collapse of Kingfisher. “With crude oil declining I see a greater appetite to lease planes in Europe rather India,” a source said.
Sharma, however, says getting planes on lease would not be a problem but the real issue is contiguous delivery schedule. “We are sorting that out,” he added.
“We are starting with our eyes wide open,” Sharma says when asked about intense competition and IndiGo’s rapid expansion. “It took IndiGo five years to become number one airline.
Thomas too allays fears regarding competition and says the company is well funded with an investment of about Rs 100 crore and has tied up with banks for working capital requirement. He said Air Pegasus will start with two ATRs and he plans to induct third within a month.
“Civil aviation minister Ashok Gajpathy Raju wants to promote regional connectivity and flights to tier II and III cities and we aim to do that. We will have morning flight between Bangalore-Thiruvanthapuram and will also be the only airline now flying Bangalore-Hubli. We plan to utilise aircraft for 9-10 hours daily and will have a turnaround time of 20 minutes. All our flights may not be equally rewarding but we operate a smaller plane with 70 seats. So even if we have 40 seats full we will have close to 60 percent occupancy. Our operating costs too will be low,” he adds.