Air Costa to Challenge Indias Airline Giants

Friday, 1st November 2013 at 04:36am

The new airline is planning to apply for a license that will enable them to cover the whole country in its route network. Its current license doesn't allow them to fly outside India's southern region.

Its CEO, KN Babu told the media that in the next six to eight months, it will apply for a pan-Indian license to enable them to start flying to most major destinations all over the country. All existing major Indian airlines have covered the entire country in their route network. If its plans will push through, Air Costa will directly compete with most of the more established airlines such as SpiceJet and IndiGo.

The Vijaywada-based Air Costa is a local carrier owned by LEPL Group, a real estate giant. After it has obtained its license to operate a few months ago, it finally commenced service with its inaugural flight taking off from Vijayawada Airport to Hyderabad on Monday.

Thereafter, it started commercial operations the next day with the launching of 12 flights out of Vijayawada to four major Indian destinations such as Ahmedabad, Chennai, Bangalore and Jaipur.

The upstart airline has an initial fleet of two Embraer 170 aircraft, each of which can seat up to 80 passengers. The airline official said that they will take delivery of eight more aircraft of the same family but bigger versions, the Embraer 190, within the year of operations.

By then, it will have increased its frequency to over 60 flights daily. According to LEPL Projects' finance director, CT Chowdary, it will increase its fleet to 25 aircraft by 2018.

The new carrier has an initial paid-up capital of Rs150 crore but is aiming to pour in US$100 million in a couple of years to support its continuing fleet and network expansions. The executive further said that the airline will derive its funds from internal accruals as well as from affiliate companies.

According to Chowdary, the LEPL Group is considering to give all company subsidiaries under its wings some form of independence in terms of decision-making policies within their respective sphere of influence.

Air Costa will be following the low-cost business model and is aiming at flying to medium-haul routes within the country which are not saturated yet.

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