Regional players may cast shadow on existing players

The proposed entry of at least four aviation start-ups that aim at operating in different regions of the country could further delay the break-even at existing airlines, which had made a combined loss of about $500 million (nearly Rs2,000 crore) in fiscal 2007 due to excess seat capacity and high fuel costs.
Domestic carriers say the lower tax paid on fuel by regional airlines and the likely aggressive pricing of their tickets can only spell bad news for them.
The ministry of civil aviation recently announced new rules for airlines planning to start regional operations between smaller cities or connecting towns with India’s large cities with small planes, typically turboprops or small passenger jets made by Bombardier Inc., Empresa Brasileira de Aeronautica SA or Embraer, and Sukhoi Aviation Holding Co., that can seat up to 100 passengers. The policy specifies that these airlines can operate from one metro airport in each region except in the South, where they have been allowed to fly between Chennai, Hyderabad and Bangalore.
Ten companies, including MDLR Airlines Pvt. Ltd, Star Aviation Pvt. Ltd, Emric Aviation Pvt. Ltd, King Air and Air Dravida, plan to start regional operations from various parts of the country. Four are likely to be awarded operating licences soon.
A top executive at one of these companies admitted his peers would likely offer low fares as a means to acquire market share. The fare reduction, said Muhamin Saidu, chief executive of Emric Aviation, would be “based on services offered”. He declined to elaborate.
But a senior executive at a national airline said he expected regional carriers to follow the strategy of any other entrant.
23/10/07 P.R. Sanjai/Livemint

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Five regional scheduled airline operators to get permit

New Delhi: The civil aviation ministry is likely to give regional scheduled airlines operator’s permit to five airlines soon. Of these five airlines, three are based out of South India and two will be based in North India. According to sources, the ministry’s aircraft acquisition committee, at a special meeting held a couple of days back, went through the operational and financial aspects of these operators and said a go-ahead to these five operators will be given soon.
The South-based operators which are likely to get the go-ahead are Chennai-based Air Dravida promoted by Sheik Dawood, Star Aviation promoted by an NRI, based in Dubai and Bangalore-based Trans India Aviation of K Chandra Shekhar. In North India, the two operators which had applied and got their papers screened are MDLR of G K Goyal and King Air promoted by Subhash Gulati.
Once the permission is granted, these airlines will take 8-10 months to start full-fledged operations. The aircraft acquisition committee, which comprises officials of the civil aviation ministry, Director General of Civil Aviation (DGCA), Airports Authority of India (AAI) and Bureau of Civil Aviation Security (BCAS), will be meeting next month again to look into other applications for starting regional airlines.
14/10/07 Raja Awasthi/Economic Times

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Four airlines make presentations to launch regional services

New Delhi: At least four aviation companies today made presentations before the Civil Aviation Ministry to launch regional aviation services.
While MDLR Airlines is the only one which has already started its operations on a non-scheduled airline permit, the other firms which made the presentations included TransIndia, Air Dravida and Star Aviation.
The Ministry in August notified the regional airline policy to grant scheduled operator permits to these companies which would operate out of six metro airports in the four regions and connect regional and non-metro airports, either by fixed wing aircraft or helicopters.
As per the policy, these airlines would not be allowed to operate on Category-I or the most major routes, especially between two metro cities.
While the four regions have been categorised as North, South, West and East/Northeast, the metros from where these airlines would operate are Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad.
11/10/07 PTI/Outlook

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National licence must for flying overseas

The civil aviation ministry had introduced a separate category of scheduled airlines in August to accommodate growing interest by smaller players for starting new airlines.
Nine passenger airlines currently have a national flying licence, while an equal number was pending approval through ­August.
Many of these have reapplied for permission now as regional carriers, including South India-based Star Aviation Pvt. Ltd, Trans India Aviation Pvt. Ltd, Air Dravida, Emric Aviation Pvt. Ltd and Gurgaon-based MDLR Airlines Pvt. Ltd.
Regional carriers from India will not be able to fly international routes unless they upgrade themselves and get the much sought after pan-India licence.
Announcing the new regional airlines policy, the civil aviation ministry had said regional airlines could fly international as long as they meet the guidelines of five years experience and possess a minimum fleet of 20 aircraft as laid down for national airlines such as Air India and Jet Airways.
However, a review of the new civil aviation requirements for regional carriers, a framework laid down by the aviation regulator Directorate General of Civil Aviation and available on the regulator’s website, makes no mention of any international operations.
The rules define a regional carrier as one that “primarily (operates) in a designated region” and can be allowed on “operational and commercial exigencies” to fly in other regions. The regions, in this case, mean the airlines can choose between North, West, South and East/North-East of the country.
11/10/07 Tarun Shukla/Livemint

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Private airports protest regional carrier sops

Civil Aviation Minister Praful Patel's ambitious policy to encourage regional airline carriers has hit an air pocket with private airport developers opposing a stipulation to offer these carriers infrastructure free of landing or parking fees.
Private airport developers in Delhi, Mumbai, Hyderabad and Bangalore, said landing and parking fees account for a significant proportion of revenues, so offering these services free would be unviable.
An executive of GMR Hyderabad International Airport Ltd (GHIAL), which runs the Hyderabad airport, said that aeronautical charges would be the key revenue earner till 2009, accounting for a third of the airport's revenues.
"Once the airport starts earning non-aeronautical revenues from hotels and other projects, it will be in a position to offer free landing and parking services," he said.
Airport developers also said providing space to smaller aircraft was unviable until their facilities are fully modernised.
"Smaller aircraft have to maintain a greater distance with larger aircraft in the air. This leads to inefficient use of airspace and runway. Operating such aircraft would only be possible after the new runway comes into place," said a Delhi airport official.
Smaller aircraft, which carry fewer passengers and put the same kind of demand on the airport infrastructure, would be very unviable to operate in the airport at this stage, an executive of Mumbai airport added.
03/10/07 Anirban Chowdhury/Business Standard

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Regional airlines policy a non-starter in Delhi, Mumbai

New Delhi: Infrastructure crunch in Delhi and Mumbai airports is now setting alarm bells ringing among private players who want to make the most of the ongoing aviation boom. With both these airports in no position to handle any more small planes, the recently cleared policy for regional airlines has been a non-starter in north and west India where Delhi and Mumbai are the bases. Almost all applications for regional airlines are for south and northeast India.
The Bird Group, a leading provider of IT services to travel industry, is now closely watching the pace of development at IGI to see when the third runway is ready. "Had infrastructure been in place, we would have launched our regional airline for the north immediately. Now the airline should take wings in 2009. There's no point having a 30-minute flight from some city to Delhi and then hover at IGI for about an hour," said Ankur Bhatia, the group's executive director.
Delhi airport expects to get an additional runway by next summer and that may solve air traffic congestion to some extent.
The real alarm bells are ringing in Mumbai as the Navi Mumbai airport - the only hope for easing the city's notorious congestion — has now hit the coastal regulation zone hurdle.
What worries aviation industry in Mumbai is that all alternate sites talked about for Mumbai like Thane are still a distant dream.
03/10/07 Saurabh Sinha/Times of India

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