India has seen a rush of regional airlines in the past two years. By the end of 2014, the aviation turbine fuel (ATF) prices began to go down which helped domestic carriers in a big way. Many airlines who were bleeding started to generate profits. The low ATF prices also lured people to start regional carriers. Airlines such as Trujet, Air Pegasus, and Air Costa have started operating in the past three years. The new civil aviation policy talks about improving the regional connectivity by developing regional airports, and capping the fares for one hour (regional) flights at Rs 2,500 per passenger. Making fares affordable and facelifting airports are important steps to give the initial boost but the whole push of regional connectivity has to be backed by consistency in services. Apparently, most of the regional carriers are facing financial problems.
Air Costa, for instance, cancelled all its flights on August 3 due to payment issue with its lessor. A month before, Air Pegasus did a similar thing after its planes were reportedly repossesed by lessor over non-payment. It seems Air Costa is still operating while Air Pegasus is taking online bookings.
The weak financial performance reflects on the operations side as well. The data shows consistently poor performance of regional carriers on several fronts. Take the case of cancellations. Airlines such as Air Costa, Trujet and Air Pegasus have consistently topped the charts in cancelling flights. In July, for instance, Air Pegasus cancelled 29.67 per cent of its flghts. That's roughly one in every three scheduled flights. The corresponding figure for Trujet was 17.38 per cent. Things were much worse in March when cancellation rates for Air Pegasus and Air Costa stood at 40.34 per cent and 18.28 per cent, respectively.
The financial problems of regional carriers, or most airlines in general, can be segmeted into five areas: high fuel prices, high airport charges, choice of aircraft, choice of routes and inability to gradually grow the fleet. Low ATF prices seems to have given a breather to airlines for now. The other areas require more careful planning. The choice of aircraft is important. Air Pegasus, for instance, has ATR 72-500, which is a twin-engine turboprop. Turboprops are ideal for short-haul regional flights but then the airline should aim for higher occupancy. High number of empty seats can be taxing. Air Pegasus' PLF (passenger load factor) has been steadily growing - from 76.6 per cent in March to 84 per cent in July.
25/08/16 Manu Kaushik/Business Today
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Air Costa, for instance, cancelled all its flights on August 3 due to payment issue with its lessor. A month before, Air Pegasus did a similar thing after its planes were reportedly repossesed by lessor over non-payment. It seems Air Costa is still operating while Air Pegasus is taking online bookings.
The weak financial performance reflects on the operations side as well. The data shows consistently poor performance of regional carriers on several fronts. Take the case of cancellations. Airlines such as Air Costa, Trujet and Air Pegasus have consistently topped the charts in cancelling flights. In July, for instance, Air Pegasus cancelled 29.67 per cent of its flghts. That's roughly one in every three scheduled flights. The corresponding figure for Trujet was 17.38 per cent. Things were much worse in March when cancellation rates for Air Pegasus and Air Costa stood at 40.34 per cent and 18.28 per cent, respectively.
The financial problems of regional carriers, or most airlines in general, can be segmeted into five areas: high fuel prices, high airport charges, choice of aircraft, choice of routes and inability to gradually grow the fleet. Low ATF prices seems to have given a breather to airlines for now. The other areas require more careful planning. The choice of aircraft is important. Air Pegasus, for instance, has ATR 72-500, which is a twin-engine turboprop. Turboprops are ideal for short-haul regional flights but then the airline should aim for higher occupancy. High number of empty seats can be taxing. Air Pegasus' PLF (passenger load factor) has been steadily growing - from 76.6 per cent in March to 84 per cent in July.
25/08/16 Manu Kaushik/Business Today
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