Air Costa Plans India Wide Network
Wednesday, 23rd October 2013 at 04:59am
In its original business plan, Air Costa only plans to cover regional routes in India such as Vijayawada, Bangalore, Chennai, Hyderabad, Ahmedabad and Jaipur.
If its application for an India-wide network is granted, it will compete directly with the more established carriers such as IndiGo and SpiceJet as well as the upcoming AirAsia India. Though the potential of the huge Indian market is big, the current aviation industry in the country is suffering badly due to stiff competition, rising fuel prices and high operating costs.
In its current license, Air Costa is not allowed to fly outside southern India.
On October 15, Air Costa commenced commercial operations following its inaugural service to Hyderabad from its hub in Vijaywada, Andhra Pradesh, the day earlier. The regional airline flies to four other cities in the south such as Ahmendabad, Bangalore, Chennai and Jaipur all from Vijayawada.
Air Costa has started commercial operations with an initial fleet of two Embraer E-170 jets that can seat up to 80 passengers each. By the end of 2014, it will augment its fleet with the acquisition of eight Embraer E-190 jets. The E-190 jet is the stretched version of the E-jet family that can accommodate up to 112 passengers. By then it will have been operating 60 daily flights across the network.
According to LEPL Project Director of Finance, CT Chowdary, the regional airline will increase its fleet to 25 aircraft by 2018. LEPL is the parent company of Air Costa.
The parent company invested Rs150 crore to set up the regional airline and is planning to pour in $100 million more in a couple of years. According to the same official, the airline's expansion program will be financed through internal accruals and other interested groups.
He further disclosed that the LEPL Group of companies is now in the process of breaking up its diverse businesses into separate entities independent of each other. He also said that public offering is not remote for the neophyte airline if it deems appropriate or if they find the economy is ripe for such move.
While it is a regional airline, Air Costa is taking aim at the budget travel market. It will primarily fly to far-flung destinations and low-density routes such as between Bangalore and Jaipur.
By: Pete Lee.