 "Air Costa expects pan-India permit by mid-November")
Air Costa, a Vijayawada-based regional carrier, will be launching services to destinations other than Delhi, after it gets a pan-India licence from the Directorate General of Civil Aviation (DGCA).
“Delhi will have fog between November and January, which creates operational issues for airlines. For a new carrier like ours, it would be better to avoid the risk and wait a little while for the launch of services to the national capital,” K N Babu, chief executive officer, told Business Standard.
He said the firm might get the licence by mid-November. The grant was taking a little longer than earlier promised by the ministry, apparently because the airline has again been subjected to security clearance, owing to some old rules. The CEO said they have been collecting data on various sectors, as they would be launching the services to destinations that are financially promising once the pan-India permit was issued.
The company, which owns a fleet of four Embraer planes, is currently operating services to nine cities, including Jaipur, Ahmedabad, Hyderabad, Bengaluru, Chennai and Coimbatore.
According to existing norms, a pan-India licence holder should have five aircraft. However, this condition is said to be removed in the new draft rules being framed by the civil aviation ministry.
“As per the existing rules, an airlines shall have five aircraft within one year of the grant of pan-India permit. We will be adding the fifth aircraft anyway,” Babu said. Earlier this year, the company said it enjoyed monopoly on three city pairs-Jaipur-Chennai, Tirupati-Visakhapatnam and Vijayawada-Visakhapatnam sectors duopoly on five others.
The average utilisation of E-170 aircraft was 10 hours and the average utilisation of the E-190 was 14.5 hours each day which is the best in the industry.
The company had achieved the break-even within 14 months from the launch of services in October 2013. It had achieved an operational profit of Rs 1.5 crore in December last year, according to the company officials.
Air Costa is a part of LEPL Group, which has interests in real estate power and infrastructure development. The group had recently announced a residential project featuring three towers ranging from 19 to 27 floors near Vijayawada.
