Regional airways hit rail, road routes
Anew carrier, FLY91, will launch a flight between Bengaluru and Goa this month, as a couple of regional airlines seek to capitalize on the emerging trend of Indians flying to short-haul destinations that were earlier covered by road or rail.
These travel segments, connected by smaller ATR, Bombardier Q400s and Embraer aircraft, are not catered to by established carriers such as IndiGo and the Air India group despite increasing demand. IndiGo, India’s largest carrier by market share, operates a fleet of around 45 ATRs and the Air India group does not have any regional aircraft in its fleet. SpiceJet offers regional flights with around 34 Bombardier aircraft. These airlines have clearly left the segment for regional carriers, who are now starting to move in.
FLY91 has started operations with a fleet of two ATR aircraft and plans to induct 30 more aircraft in the next five years. The space is underserved, and has a regional aircraft fleet of less than 10% of the total domestic fleet.
The entry of regional airlines with a sustainable and viable business model could give wings to this segment, industry experts said.
“Regional air transport in India has been quite neglected in the sense that no dedicated focused player ever really existed since Vayudoot in the 1980s or Indian Airlines up until 1995,” said Mark D. Martin of Martin Consulting.
Currently IndiGo, and Kingfisher and Jet Airways in the past, provided more of a feeder service than being focused on regional connectivity along with their national network, Martin added. “With that in context, the launch of FLY91 and the expansion of Kolhapur-based Sanjay Ghodawat group’s regional aviation venture Star Air are good signals for the regional segment,” he said.
With major airlines in India going through challenges as there have been supply chain issues, regional connectivity would have never been on their growth plan and the entry of these carriers will help the segment, experts said.
The Union government in its 2016 policy introduced a new category of airlines, which were scheduled commuter airlines with a low capitalization threshold, and also allowed airlines operating on regional routes under its Ude Desh ka Aam Naagrik (Udan) scheme with viability gap funding to form code share partnerships with carriers operating on major routes to make regional airlines more viable. A code share is a business arrangement in which two or more airlines publish and market the same flight under their own airline designator and flight number as part of their published timetable or schedule.
Regional airlines with sustainable and viable business models could give wings to the short-haul flights segment