Monday, January 07, 2019

UDAN sees bumpy trajectory as 8 regional airlines suspend operations in two years: report

Six months after the Ministry of Civil Aviation tom-tommed the success of the second round of bidding under the UDAN (Ude Desh Ka Aam Nagrik) scheme early last year, one of the bidders found itself grounded. Gurgugram-based Zoom Air, which had reportedly bid for the Northeast routes, had to suspend operations in July 2018. In fact, at least seven other regional airlines, including Air Odisha, Air Costa, Supreme Airlines and Air Carnival, have also ceased operations in the past two years, Mint reported. Financial and operational challenges, high costs, scarcity of airport slots, maintenance issues and promoters' inability to raise capital are among the reasons cited for the closures.
Furthermore, citing data from the Directorate General of Civil Aviation (DGCA), the daily added that Air Deccan has not flown since last October, less than a year after its relaunch under the scheme in December 2017. Although the DGCA has renewed Zoom Air's flying permit in December after holding it back over safety concerns, there is no clarity on when the carrier will take to the skies again. The buzz last month was that it was close to finalising talks for a capital infusion to the tune of Rs 100 crore and would resume operations by mid-January. Meanwhile, Coimbatore-based Air Carnival has been sent to liquidation.
While there's no denying that the ambitious Regional Connectivity Scheme (RCS) has brought many new routes and unserved airports on the aviation map, the scheme's trajectory has certainly been bumpy in the past year underscoring the plight of small Indian carriers. "The RCS scheme isn't viable by itself (especially for regional airlines) unless you change the high cost structure that's associated with airlines business, and improve infrastructure," aviation consultant Mark Martin, chief executive officer of Martin Consulting LLC, told the daily. "Major Indian airports like Delhi and Mumbai don't have any more slots that can connect them to more underserved and unserved airports, further impacting the scheme."
07/01/19 Business Today

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