Ex-Vayudoot MD plans franchise model airline

Want to own an airline? It could be as easy as getting franchisees for Dominos or McDonalds, if former Vayudoot Managing Director Harsh Vardhan manages to get his plans off the ground.

The once blue-eyed boy of the aviation sector in the country, Vardhan aims to return to the Indian skies — this time, as an entrepreneur. His chosen business model would be franchisees.

According to his plan, Starair Consulting, an aviation consulting firm he owns, would be an umbrella organisation, for new regional airlines. These new fliers would serve small towns. Entrepreneurs would be allowed to operate their own airlines under the brand name, SuperFast Airlines.

“Aviation in India is a great but a tough market. Not many can crack it as it requires massive capital investment and business planning,” said Vardhan. “We want to create one or two small airline operators. We would help with contracts for bulk orders, etc.”

Highlighting the fact that the franchisee model would be introduced in the county for the first time, he added: “The risk profile for smaller players would very little.”

The model, prevalent abroad, is yet to be cleared by the regulator, Directorate General of Civil Aviation (DGCA). “We have not yet a given final approval to such a ownership model," said a DGCA official.

Vayudoot was a regional airline, established in 1981 as joint venture between Air India and the erstwhile Indian Airlines, aimed at providing services to the Northeast. It ceased operations in 1997. Vardhan is confident of leveraging the knowledge he gained in at the helm of the firm. “In the late 1980s, we were able to achieve 70 per cent load factor while serving small towns,” he said. The government has announced plans to augment regional connectivity. Initially, Vardhan would aim to serve towns in the Northeast, Jharkhand, Madhya Pradesh, Maharashtra and Rajasthan.

“Regional aviation is a great market. The market size has grown manifold. The industry has also grown beyond the metros. I see a great opportunity to fly smaller aircraft between these places,” Vardhan said. His company would also help in training pilots. It is in talks with a third-party vendor for providing technical services to the airlines.

“We would provide all fundamental support, including training and technical assistance,” he said.

“The idea is to create a national organisation, so that the profile becomes better and the market acceptance of those individual operators becomes better among other stakeholders.”

Smaller airlines would benefit from economies of scale, helping them break even sooner.