Air Deccan to connect MP to south India

Air Deccan is looking at a new sector in Madhya Pradesh. After successful launching low-cost flights in Indore, Jabalpur and Bhopal, the airline now has plans to connect the state with southern India.

"We are planning to connect Bhopal-Hyderabad-Bangalore or a similar operation. I have been advised to explore possibilities in connectivity with southern India" Gopinath, managing director, Air Deccan, told Business Standard here in Bhopal.

He was in the town to participate in the Hoteliers and Restaurant Association (western region) meet organised here to develop Madhya Pradesh as a tourist destination.

He further said, "We will submit a proposal in next fifteen days to expand our air services in the state. Hyderabad Bangalore and Chennai are some possible destinations we can look at. We are also planning to connect Bhopal to Raipur and some cities of Gujarat. But it will take two to three months to come to a conclusion."

Private operators have skipped Madhya Pradesh in the absence of proper response from the state government. The aviation turbine fuel surcharge is higher in Madhya Pradesh.

On numerous occasions, top business chambers including the Confederation of Indian Industry, the PHD Chambers of Commerce and Industry and FICCI had urged the state government to reduce ATF, but nothing has been done in this so far.

"Surcharge on air turbine fuel (ATF), which in MP is amongst the highest in the country at 25 per cent, seems to be one of the major reasons why private airlines and air taxi services are shunning the state. Andhra Pradesh, Rajasthan, Orissa and Chhattisgarh have substantially gained from bringing down the surcharge on ATF to 4 per cent," CII said in a note submitted to the Madhya Pradesh government.

According to the Hotel and Restaurant Association, Madhya Pradesh has an 8,000 room capacity and Chhattisgarh has 5,000 rooms. The association has also demanded no frill airline connectivity to Bhopal from major destinations like Mumbai, Ahmedabad and the southern parts of the country.

Air Deccan is also planning to purchase 30 more Airbus A 320s at a list price of $1.5 billion. The acquisition deal was signed with Airbus Industries recently, said Gopinath.

Air Deccan had earlier this year placed orders for 32 Airbus A 320s and 30 ATR 72-500s. This fresh order will take the total of aircraft to 92.

Air Deccan currently has a fleet of 24 aircraft comprising 7 Airbus and 17 ATRs. After the acquisition of the new aircraft, the fleet size will go up to 110-115 planes by 2012- 13.

Next year, the airline will receive eight A 320s, followed by ten every year thereafter, taking the fleet size to 32 by the end of 2006.