Jagson Airlines, Murli Dhar Lakh Ram (MDLR) Airlines and Paramount Airways, predominantly regional players, had offered connectivity to the farthest corners of the regions they operated in, on routes such as Kullu, Leh and Tiruchirapalli. However, Gurgaon-based MDLR has been grounded and Delhi-based Jagson is operating mostly charter services. As for Chennai-based Paramount, the Directorate General of Civil Aviation said recently it breached all flying and permit rules.
Against this background, two new regional airlines are likely to start operating within Gujarat in the next few months. One of them is Luan Airways, a full-service carrier, to be based in Surat. The reason for choosing Gujarat as its base, the website of the carrier says: “The trade potential and per capita income of Gujaratis rank among the highest in India. By nature, they are large spenders and frequent travellers both for business and leisure. In pilgrimage tourism, too, Gujaratis are the foremost travelling community.”
The rates are expected to be on par with full-service carriers. For example, Jet Konnect from Ahmedabad to Baroda and back charges Rs 6,000-plus.
The promoter of the airline is Binod Chhawchharia, an Assam-based entrepreneur, with interests in real estate, contracting and manufacturing industry.
Similar was the case with Jagson, MDLR and Paramount. All three were part of larger conglomerates and had to compete for investment and financial backing with other businesses within the group. While MDLR’s owner had other businesses to concentrate on, Jagson Airlines was part of a larger group, Jagson International. M Thiagarajan, owner of Paramount, has interests in textiles under the Paramount Group.
An analyst said: “If the spread was larger, such as two-three states, it would have made sense. Within Gujarat, if a train can take me to my destination within four-five hours in more or less the same time and at a price three-four times lesser, people would opt for it. Air routes may be used by VIPs such as ministers and high net worth individuals, but not by regular businessmen.”
| DESTINATION GUJARAT # Luan Airways will connect Surat with Bhuj, Rajkot & Bhavnagar initially # Ventura Airlines will connect Ahmedabad with Jamnagar, Bhavnagar, Bhuj and Surat # Jagson operated on Delhi-Kullu, Delhi-Shimla, Shirdi-Mumbai and Shirdi-Pune routes # Paramount operates in Chennai, Madurai and Coimbatore # MDLR operated in Chandigarh, Delhi, Goa, Kullu, Jamshedpur, Ranchi, Lucknow and Kolkata # Aviation market has grown to 44 million in 2009 from 22.30 million in 2005 # No. of flights has grown to 3,000 from 1,900 in five years # Gujarat’s per capita income in 2008-09: Rs 49,251 (as against per capita debt of Rs 16,628) |
Gokul Chaudhri, partner, BMR Advisors, a professional services organisation, agrees: “Experts are of the view that for a distance of 200-300 kilometres, it is efficient to have high speed trains, because the time taken while checking in, security clearances, etc amount to the time taken by a train. I think these regional airlines are emerging to fill the gap of high-speed transportation.”
Analysts say being a regional airline has nothing to do with the business not taking off. A Mumbai-based analyst said: “It’s like any other airline. Operational efficiency and good financial backing are crucial to running the business well. All of them started out claiming good load factors, but there’s a downturn every five years and the airline industry requires at least two-three years to break even, so the ability to sustain losses is crucial.”
