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However, ideally, mainline carriers should stick to their core competency, mainline routes and leave the regional space to regional carriers. Only dedicated regional airlines can genuinely meet the regional aspirations.
There are stray signs of hope for regional carriers. In July, Religare Voyages’ Air Mantra became the first regional airline to be launched since MDLR Airlines (the only other regional carrier that actually commenced operations) stopped flying in October 2009. Air Mantra is starting small with two 17-seat Beechcraft 1900D planes connecting Amritsar and Chandigarh, but it also has ambitious plans to open up new routes. Another impending entrant is Air Costa, which plans to start operations from hubs at Hyderabad and Chennai with a fleet of five Bombardier Q400 aircraft and touch several destinations in South India. The Ministry of Civil Aviation has also granted regional airline no objection certificates (NOCs) to Freedom Aviation and Air Pegasus in the southern region; Deccan Charters in the western region; and Indus Airways and Karina Airlines in the northern region. If at least some of these contenders get off the ground, regional aviation’s hopes of growth will be that much brighter.
SPARKLING PROSPECTS.
The long-awaited comprehensive review of India’s aviation policy, including liberalised investment norms and recalibration of the irksome route dispersal guidelines (RDGs), should provide a welcome fillip to regional aviation. According to AAI estimates, traffic from non-metro air- ports is growing twice as fast as that from the metros and may surge to 45 per cent of the total within just five years. This growth is likely to bring pain till airport infrastructure catches up. Safety will also need to be closely monitored because rapid growth often breeds shortcuts.
At present, all Indian carriers with the exception of IndiGo are bleeding due to high fuel prices, high taxes, falling rupee value and scarce capital. The main item hurting the balance sheet of airlines is fuel, which accounts for over 45 per cent of a carrier’s operating cost. According to IATA, taxes on jet fuel have reduced the competitiveness of India’s airlines, and are ‘sucking the life blood’ from the sector. Adding aviation fuel to the list of declared goods with a uniform levy of four per cent across the country would dramatically reduce the airline industry’s burden and could set it on the road to high growth again. The long-term gains of economic activity and employment generation would more than compensate for the notional loss of tax revenue in the short term. Apart from this, a fledgling industry like regional aviation would benefit from the establishment of an Essential Air Services Fund (EASF) and other investor-friendly measures, to encourage new regional routes at least for the first three to five years of operation.
Still shackled by inadequate infrastructure, high costs and lack of a coherent regional aviation policy, Indian regional aviation is like a tiger waiting to be unleashed. But when it finally takes off, there will be no stopping it.