Tuesday, October 30, 2018

Modi's regional airline push fails to take-off for Indian carriers

Most of India’s regional airlines, launched with much fanfare under regional air connectivity scheme (RCS) introduced by Narendra Modi's government, are suffering with low passenger load factor (PLF).

More than a year and half after its take off, the regional carriers have PLFs ranging between 19 percent to 52 percent in the April-September 2018 period, according to data available with India’s Directorate General of Civil Aviation, under the civil aviation ministry.

Air Deccan, re-launched by the founder of low cost airlines in India Capt Gopinath, has been registering PLFs ranging from 19 percent in July to 68 percent in February this year, while Air Odisha has fared even worse during January-Sept period this year with 27 percent to 33.5 percent PLF.

Ahmedabad-based GSEC Aviation, along with Monarch Networth Capital, currently holds major stakes in both Air Deccan and Air Odisha.

India’s leading scheduled airlines are also operating in some of the regional routes under the RSC (also known as the Udan scheme).

While segregated data related to their PLF on these routes is not available, sources said airlines like SpiceJet and IndiGo are doing well in their operations on Udan routes.

Under RCS, the government has capped airfares, which are indexed to inflation, at Rs 2,500 ($34) for a one-hour flight or for a distance of 500 to 600 kilometres.

The regional airlines that operate on short-duration routes also receive huge tax benefits on fuel, as well as concessions on electricity, water and other utilities at regional airports.
30/10/18 James Mathew/Arabian Business

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