Booming Country Wants More Rural Regional Air Service
India's first scheduled regional
airline is ready for takeoff. Chennai-based Star Aviation Pvt. Ltd
-- an airline unit of ETA Star group, headquartered in Dubai -- is
soon to get an operating license from the civil aviation ministry,
according to the Wall Street Journal.
Regional airlines are permitted to fly only between India's
large and small cities or between small cities under government
rules, in an effort to halt rising fares in an industry under
consolidation. Routes between large urban centers are protected for
larger carriers.
Star Aviation has been given permission -- the first in a year--
to start service in the South, according to civil aviation minister
Praful Patel.
ETA Star is a conglomerate with interests in engineering,
construction, shipping, automobiles, manufacturing, retail, travel
and energy, according to its website.
Earlier this month, it ordered a mid-sized business jet from
Hawker Beechcraft Corp. for operations in West Asia. The group had
revenues of $4 billion in 2006.
According to presentations to the government by Star Aviation,
it will operate Italian-French manufacturer Avions de Transport
Regional (ATR) with a fleet of five turboprop planes.
It will have operational base in Chennai, together with aircraft
maintenance facilities at Hyderabad.
Nine other airline companies had been pending approval till
August when the aviation ministry announced a separate category of
airlines meant to serve rural India.
After the new policy was announced, some of the
airlines-including Star Aviation-awaiting national licenses
reapplied for regional permits.
There is no word on the other players, including Air Dravida,
Bangalore's Trans India Aviation Pvt. Ltd and Gurgaon-based MDLR
Airlines Pvt. Ltd, will get regional permits anytime soon.
"We haven't said no or rejected anyone," said minister Patel,
responding to a question on whether other pending players will also
be issued regional licenses in the next three months.
"But we have to see-if something goes wrong tomorrow then
everyone will blame us. So it's better to do a thorough assessment
before-hand."
Government officials are expected to take a wait-and-see
attitude before issuing other permits. "Regional doesn't mean money
is not involved-regional (airline) will also grow bigger tomorrow.
And to become bigger, we have to see what is their potential,
evaluate their background," he added.
The minister had earlier said regional airlines would take to
the skies in the next six months.
"Regional (aviation) is the future, because there is a lot of
opportunity connecting tier II and tier III cities with smaller
airlines, ATF (aviation turbine fuel) is cheaper, landing and
navigation charges are waived for 80-seater and smaller planes," he
had said.
Tax on jet fuel for the smaller planes regional carriers will
use is set at a low 4% compared with the 30-40% that national
carriers pay for fuel.
Regional carriers based in South India will also have the
benefit of operating from less crowded airports.
The new international airports at Bangalore and Hyderbad will be
operational by the end of March.
The government's regional airline policy allows such airlines to
fly between the cities of Bangalore, Hyderabad and Chennai, unlike
other places in India.
"There are number of routes which could support regional
airlines in the South like Hubli, Belgaum, Bellary, Salem, Tirupati
and Pondicherry, which are less connected," said Paramount Airways
managing director M. Thiagarajan.
Anyone with a 20-50 seater aircraft can bring passengers and
feed them to the larger airlines in the metropolitan cities,"
Thiagarajan said.