Wednesday, April 16, 2014

Wings for small cities

The country’s latest regional carrier Air Costa’s business plan has worked well enough for its chairman Ramesh Lingamaneni to say the airline will become profitable from 2015.
In an industry where major players are bleeding from high taxes, Vijayawada-based Air Costa is doing relatively well by keeping its operations restricted to tier-2 and 3 cities.
Larger airlines have also recognised an opportunity in smaller cities. The Wadia-group owned no-frills Go Air plans to introduce flights to smaller cities–in states like Bihar, Uttar Pradesh, Madhya Pradesh—sniffing the strongest growth opportunities in these markets.
The airline is even exploring opportunities to use smaller aircraft like ATR to enter such markets.
“We have recorded a significant increase in our tier-2 operations in places like Patna, Lucknow, Jaipur, Kochi, Chandigarh, and Jammu & Kashmir, while our metro-to-metro business haven’t witnessed significant growth”,
Air Asia India, a venture between Air Asia and the Tatas, is set to start its operations in India this year. The airline’s group CEO Tony Fernandes has made his strategy for India public—smaller cities are to be the key market for AirAsia’s aggressive flight plan in India.
Today, the non-metro airports account for only about 30% of the total air traffic, but is expected to rise to 45% in the next few years, says a civil aviation ministry official.
The government is also currently in the process to identifying the most suitable low-cost viable model for the construction of 15 additional airports under the Greenfield Airport Policy.
16/04/14 Rhik Kundu/Financial Express
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