Indias First Regional Airline Soon To Take off

Thursday, 19th September 2013 at 15:38pm

India's aviation industry may have experienced turbulent times in recent years but this does not deter a company engaged in real estate development to launch a new airline.

To be called Air Costa, the new regional airline is a wholly-owned subsidiary of Lingamaneni Estates and Projects Limited (LEPL), a diversified company based in Vijayawada.

LEPL was established in 1983 to engage originally in real estate construction and contracting business but soon diversified into property and infrastructure development across several sectors.

Air Costa will be the conglomerate's first foray into the aviation business. For the record, it will be the country's first regional airline whose hub of operations will be in the state of Andhra Pradesh.

Officials from LEPL announced early in June this year that they will launch a new airline. Immediately thereafter, they are applying for a permit to fly as a regional carrier whose coverage will be most of the cities in southern India.

The company source who refused to be identified said that manpower is already in place such as pilots and flight crew in preparation for its launch later this year.

India's commercial aviation industry has been experiencing rough rides in recent years that sent many players to pile up losses and cost one airline to fold up. Kingfisher Airlines ceased operations in September last years after a series of flight cancellations and delays due to aircraft shortage, which in turn caused by fleet grounding on order by its lessors and creditors. Its license was not renewed after its expiry in December of 2012.

The troubled aviation market has seen domestic passenger traffic down by 3-5% in the first five months of the current calendar year. The untimely demise of Kingfisher, however, has pushed the passenger load factor in India's domestic market up by 200 bps to 400 bps due to the reduction of seat availability.

The launch of Air Costa, according to industry experts, would not be affected by the turbulence experienced by the aviation industry in general. Since it is a regional airline, its market is also limited to the cities in South India whose economy is booming fueling the demand for air travel within the region.

The regional airline will initially have three Embraer jets in its fleet for its inaugural operations. Each aircraft can seat 70 to 80 passengers depending on the configuration during its launch.

By: Pete Lee.