The newly elected government in its first month in office has issued ‘no objection certificate’ (NOC) to two companies to establish regional airlines, one is Air Carnival based in South India and the other is Zav Airways which will cater to the East and North-Eastern regions. The approvals, according to the Minister of State for Civil Aviation, G.M. Siddeshwara was accorded on June 24 and 30, respectively.

Air Carnival Charter Service was established in 2013 and is based in New Delhi. It is founded by S.I. Nathan who runs the Air Carnival Aviation Academy in Coimbatore and Chennai. As per the website of Air Carnival, it is going to provide cost-effective and reliable charter services as of now. Air Carnival is now all set to start a regional airline.

The other NOC is for Zav Air which is gearing up to provide inexpensive personal helicopter flights or air taxi services. The Zav Air website does not mention anything about regional airlines, but states that it will initially network North-Eastern region and the Eastern region. Headed by Kishore Zavery, Zav Airways aims to provide cheaper private air travel. It says it has been flying customers in helicopters from Aizwal to Dwaraka and Leh to Kanyakumari.

2010 Proposals Back

Zav Airways. In 2010, it had submitted proposals to start a regional carrier, planning operations in the East and North-East, with two Bombardier 80-seater and 70-seater planes. It is hoped that this time round, Zav will take to the skies.

The Ministry of Civil Aviation has also issued NOCs to AirOne Aviation, Premier Air, Turbo Megha and Zexus Air Ltd.

AirOne aviation. Promoted by the former President of Air Sahara, Alok Sharma. The company currently offers charter services to domestic and international destinations. It holds an operating permit for charter operations and as per the airline website, it was to have ten aircraft by the end of 2013 of which three are helicopters. The airline service primarily operates out of Delhi, Mumbai and Lucknow.

Zexus Air. It is a Delhi-based company and according to reports it has applied for an air operator certificate with the Directorate General of Civil Aviation (DGCA) and intends to add four Embraer jets as per its application with DGCA. The aircraft were previously with Brazilian regional operator TRIP Linhas Aereas. No other details of Zexus Air is available.

Premier Air. Reportedly promoted by non-resident Indian Umapathy Pinaghapani, the the airline is based out of Bengaluru and it was to launch a regional airline in the name of Air Dravida. There is no sign of any such development.

Turbo Megha. Headquartered in Hyderabad, the charter airline service has two active partners Ram Charan Tej Konidala and Vankayalapati Umesh. Set up in 2003, it initially provided ground handling services to airlines before diversifying into charter operations. The airline service has one helicopter and two small jets for charter operations from Hyderabad.

It remains to be seen as to which of these manage to commence operations, considering what happened earlier. It may be recalled that in 2010, the government approved half a dozen new regional airlines which included Star Aviation, Zav Airways, King Airways, Sky King Aviation, Premier Airways and a cargo carrier. It was touted that the Chennai-based Star Aviation, promoted by Dubai-based real estate company ETA Star, is likely to be the first to fly with three Embraer aircraft. There is no news after that.

Regional Connectivity Expansion

India’s civil aviation regulator is likely to make it easier for companies to start flight operations, especially those seeking to use small planes. It’s also recommended that small operators be allowed to run scheduled services to boost connectivity of destinations that aren’t served by airlines. Approval by the Ministry of Civil Aviation (MoCA), comes in the wake of a progressive thinking on the part of the new government. It has overturned the policy of selectively granting aviation licences to applicants. This year, we have seen Tata Sons low-cost joint venture with AirAsia Bhd takeoff and the expected launch of the Tata-Singapore Airlines joint venture. All these moves are likely to stoke competition, leading to lower fares for consumers and importantly enhanced connectivity across the country.

Data by the Centre for Asia Pacific Aviation for 2012 indicate per capita domestic airline seats is very low in India, just 0.07, compared with 3.35 for Australia, 2.49 for the US, 1.38 for Canada and 1.05 for Japan. With the number of domestic air passengers in the country projected to triple to about 175 million annually by 2021 from 58 million in 2012, start-up airlines from AirAsia India to Tata-SIA have announced new ventures to tap in on the growth in the market.

It is now for these applicants who have got the NOC to approach the DGCA for an airline licence, a process that reportedly takes about three months. The scope for new airlines entering the market is good as indicated by the consulting firm, Centre for Asia Pacific Aviation (CAPA) which has pegged the growth of domestic airline around eight to ten per cent.

Measures to Prop Aviation Sector

The Narendra Modi Government has announced a slew of proposals to boost the aviation sector and wants to fast-track airport infrastructure development, boost regional connectivity and enhance competition among existing airlines. The previous government had come out with a policy on enhancing regional air connectivity and the new government is adding to the destinations.

The Minister of State for Civil Aviation Siddeshwara has said that the ministry had identified 50 locations in various states with potential for small airports. The question is how will the state governments contribute to airport development which in turn will have positive impact on the state’s revenues. No-frills airports which cost just Rs. 70- Rs. 80 crore will be constructed in areas which fall in the tourism circuit or backward areas where connectivity needs to be boosted.

The only regional airline which has succeeded in recent times is Air Costa which operates four aircraft with 34 flights across nine cities mainly in South India. It connects Bengaluru, Hyderabad and Chennai with smaller cities such as Jaipur, Madurai, Vijayawada, etc by using two Embraer aircraft types — a 67-seater E-170 and a 112-seater E-190.

Air Costa CEO, Ramesh Lingamaneni said that the airline has succeeded because of its judicious approach to new routes, fleet size and the fact that it chose these two aircraft after evaluating routes and demand potential. In three of the last six months, Air Costa has seen 100 per cent on-time performance and its aircraft occupancy in June was 82 per cent, among the highest.

Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, has said, “It is a great development. KPMG believes that the next phase of growth of Indian carriers will come from no-frills airports (NFA) and regional carriers. This will prevent large national carriers from wasting fuel on half empty planes on regional routes just to meet DGCA’s Route Dispersal Guidelines norms. For this, MoCA should allow seat trading and code shares between national and regional carriers.”

The government hopes that the granting of NOCs and Air Operator’s Permit to new operators would fast-track its intention to fly to destinations not currently served by existing operators.

In March this year, the Ministry announced the policy on regional and remote area air connectivity. The following concessions will be provided to passenger or cargo aircraft which operate to underserved airports for an initial period of three years:

• Exemption from landing and parking charges, RNFC charges, fuel through-put charges and any other charges levied by AAI.
• Airlines/operators will be allowed to manage their ground handling at airports.
• Ministry of Defence would be requested to give similiar concessions under their control. The Ministry has identified 45 small airports where the concessions will be applicable.

The aim of the policy is to encourage airlines and other operators to operate to such airports where infrastructure has been made available by offering certain incentives and thereby reducing viability gap, if any for such operations. We need to see who all take the bite.