Monday, April 19, 2021

Trujet has survived in the world’s toughest aviation market, but what next?

Last week, Interups fund from the USA talked about investing in Indian regional carrier Trujet. While investments are not new in Indian aviation space, what would make any analyst take note is the interest expressed in a smaller jet.

Trujet took to the skies in July 2015 and with seven aircraft has managed to do something which many of its compatriots in the regional space haven't been able to— surive. The history of Indian aviation is littered with dead airlines. The list includes recent casualties such as Air Costa, Air Pegasus, Paramount and Air Carnival.

Trujet’s six years have been eventful. True, Trujet had an advantage in the form of subsidy under Regional Connectivity Scheme (RCS) under the aegis of UDAN (Ude Desh ka Aam Nagrik) . But Indian aviation is too brutal for airlines to surive on the basis of subsidy alone. Remember, the subsidy too is restricted to three years after which competition will either gobble up routes or they would become unsustainable.

The airline also benefited from the demise of Jet Airways but UDAN 1.0 was helpful because it secured monopoly on some routes. This helped the airline establish some good routes like those to Salem from Chennai, Cuddapah and Vidyanagar. Not only were these monopoly airports, but they also boasted immense tourist or commercial importance.

Trujet also showed the smarts to stick to only two bases—Hyderabad and Ahmedabad— as opposed to going all out and being scattered all across the country. This focussed apprach has helped it consolidate sales and distribution efforts, which is a significant cost for airlines and could make or break its revenue stream.

19/04/21 Ameya Joshi/Moneycontrol

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