Apart from MDLR Airlines, several companies, including Star Aviation Pvt. Ltd, ZAV Airways Pvt. Ltd, Jagson Airlines Ltd and King Air Pvt. Ltd, were licensed to fly as regional carriers, but none of them could start because of high jet fuel prices and the economic slowdown of 2008. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)
Apart from MDLR Airlines, several companies, including Star Aviation Pvt. Ltd, ZAV Airways Pvt. Ltd, Jagson Airlines Ltd and King Air Pvt. Ltd, were licensed to fly as regional carriers, but none of them could start because of high jet fuel prices and the economic slowdown of 2008. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

Air Costa to begin operations in two months

New low-fare, regional, passenger airline to link Vijayawada, Hyderabad, Bangalore and Chennai

Mumbai: Air Costa, a new passenger airline run by Air Costa Aviation Pvt. Ltd, is expected to commence operations in the next one to two months using Brazilian made Embraer E-170 aircraft, even as scheduled airlines lost an estimated $1.95 billion in the last fiscal amid slowing economy.

Air Costa said it will be operating as a low fare airline with two classes. As per the original plan, Air Costa was set to launch from July.

Air Costa, promoted by the Vijayawada-based construction firm LEPL Group, is set to become the first regional airline of south India.

The ministry of civil aviation had introduced so-called scheduled operator permits for regional airlines in August 2007, to increase air services to smaller cities.

Regional airlines are required to operate in the small towns within one of the designated regions—north, south, west, east and the north-east region. But they are not allowed to connect to more than one major city, except those licensed to fly in the southern region.

Airlines with non-scheduled licences are not allowed to publicize their flight schedules the way carriers such as Jet Airways (India) Ltd or Air India Ltd can.

“Air Costa introduces its own version of comfort and class in its seat configuration with competitive fares to provide the air traveller what he truly desires. Air Costa will be the first low-cost carrier with twin-class cabin configuration," wrote K.N. Babu, chief executive officer at Air Costa, in a circular dated 3 September to travel agents.

Mint has reviewed the circular.

To start with, Babu wrote, his airline will be connecting major south Indian cities Vijayawada, Hyderabad, Bangalore and Chennai.

“Air Costa is all set to begin its services shortly. We are in the process of setting up our offices in cities and airports we plan to operate from," Babu wrote.

He did not divulge details for the delayed launch or of the twin-class configuration.

In an August report, consultancy Centre for Asia Pacific Aviation (Capa) said Air Costa is set to start operations in next two months.

On 1 April, Mint reported that Religare Voyages Ltd, which runs Air Mantra, stopped operations of the regional airline eight months after its start because of poor bookings.

Religare Voyages is promoted by brothers Malvinder Singh and Shivinder Singh.

Air Mantra started operations in July with daily flights connecting Amritsar and Chandigarh.

It became the first regional airline to be launched in India in five years. MDLR Airlines Pvt. Ltd, the only regional carrier that started operations, stopped flying on 1 October 2009.

Air Costa’s Babu wrote that the fleet of his airline comprises Embraer aircraft with no middle seat.

Apart from MDLR Airlines, several companies, including Star Aviation Pvt. Ltd, ZAV Airways Pvt. Ltd, Jagson Airlines Ltd and King Air Pvt. Ltd, were licensed to fly as regional carriers, but none of them could start because of high jet fuel prices and the economic slowdown of 2008.

Significantly, Paramount Airways Pvt. Ltd, a scheduled airline that had a substantial southern focus, suspended operations after the aviation regulator cancelled its operating licence when it fell short of the minimum five aircraft requirement.

Paramount Airways had also used Embraer type of aircraft with no middle seat and offered twin-class configuration.

Another scheduled airline Kingfisher Airlines Ltd’s operating licence was suspended in October by the Directorate General of Civil Aviation (DGCA) following a strike by its employees. The permit has since expired, although it can be renewed within two years.

Indian airlines, excluding the grounded Kingfisher Airlines, are expected to lose a combined $400-450 million in the second quarter of the current fiscal, Capa, said in its August report.

In the first quarter of the current fiscal, the airline industry lost nearly $200 million although low-fare carriers had posted profit in the range of $40-$50 million.

The airlines lost an estimated $1.95 billion in the last fiscal on combined revenue of $9.5 billion.

Close