MDLR, three start-ups clear first hurdle in race for regional licences

MDLR, three start-ups clear first hurdle in race for regional licences

At least three start-up airlines from the South and one based in Gurgaon near New Delhi plan to start regional services soon after receiving approval from the Union government, expected by end-October.

Two start-ups from Chennai—Star Aviation Pvt. Ltd and Air Dravida—and Bangalore’s Trans India Aviation Pvt. Ltd, as also MDLR Airlines Pvt. Ltd , have been shortlisted before a decision is taken to award licences.

Applications of two other airlines, Emric Aviation Pvt. Ltd and King Air (formerly UP Air), have been turned down.

Emric’s proposal was turned down pending security clearances from the Union home ministry for its directors. King Air’s request for a regional licence failed to move forward because of some dues owed to the Airports Authority of India when it was operating as a charter airline in an earlier avatar.

In August, the civil aviation ministry had proposed a new category of operating aviation permits to carriers that aim to connect tier II and tier III or smaller cities in the country with short-haul aircraft.

Nine applications for national licences have not been approved for nearly a year.

Soon after the new policy, some of the airlines awaiting national licences re-applied for regional permits.

These included Star Aviation, Trans India Aviation, Air Dravida and Emric Aviation, all four of which want to start operations in South India, where air traffic outpaced other regions last year. Better aviation infrastructure in the region with new international airports coming up at Bangalore and Hyderabad and spare capacity at the aerodromes at Chennai and Kochi are additional factors encouraging start-up carriers to set up shop in the South.

In North India, where the government asked scheduled airline operators to add more late night flights at the New Delhi airport in the absence of available day slots, Lucknow-based King Air and MDLR Airlines had sought similar permissions, a senior civil aviation ministry official, who did not wish to be quoted, said.

These regional start-up airlines were invited to make presentations at the ministry last week on their proposed plans.

Emric’s chief executive Muhaimin Saidu said he was hopeful of receiving no-objection certificates from the government soon. “At the same time, we would not like to wait, so we are organizing simultaneously for manpower, talking with aircraft leasing companies and putting other infrastructure in place," he said.

The entry of these start-up airlines is likely to increase the appetite for regional jets in India. Depending on government clearances, Star Aviation plans to lease five turboprop aircraft in the first year of operations to connect cities near Chennai, while Trans India Aviation proposes to buy Canadian-built Bombardier Q400 turboprops for its operations in the cities of Vijayawada, Visakhapatnam, Coimbatore, Madurai and Tiruchirapalli.

Air Dravida also plans to lease three turboprop planes for initial services.

MDLR Airlines, which already runs charter services in the northern cities, plans to use its existing Avro RJ-70 aircraft to connect Ranchi, Jaipur, Dehradun, Chandigarh, Jodhpur, Raipur, Pathankot and Dharamsala with New Delhi.

Besides increased frequency of planes among smaller cities, the entry of start-ups will put pressure on national carriers to reduce ticket prices on many sectors where they have a monopoly. Short-haul trips between, say, Kozhikode and Kochi in Kerala, booked a day in advance cost up to Rs8,500, including taxes.

Sectors such as the New Delhi-Kullu route is one of the most profitable sectors for low-fare carrier Simplifly Deccan (formerly Air Deccan), run by Deccan Aviation Ltd.