All is not well!

While the Regional Connectivity Scheme unfolds gradually, one has to wait and watch how this is going to impact the mainline players and the regional players, including general aviation operators

- R. Chandrakanth

EVERYONE IS TALKING ABOUT how Indian aviation will soar in the years to come, with aviation growth registering over 20 per cent year on year, reflected mostly by massive surge in passenger movement. They all seem euphoric that India will be the third top aviation market in the next five years, from its current ranking of ninth. That is a phenomenal jump. Everyone is banking on the National Civil Aviation Policy and the Regional Connectivity Scheme to do wonders. While the top echelons in the Civil Aviation Ministry are doing everything to create an ecosystem for growth, there are still many issues that are eroding airline performance, more so of the regional airlines.

REGIONAL AIRLINES GETTING GROUNDED

All is not well on the regional airline front. The first regional airline from Vijayawada — Air Costa — is again in the news for all the wrong reasons. It has suspended flight operations due to financial muddle, the second such set back in nearly four years of its operations. While it began on a good note, peaked it with ordering 50 E-Jets E2 at the 2014 Singapore Airshow, Air Costa is now facing another bout of financial nightmare. The company, which had four Embraer aircraft at its peak, is left with none as the lender GE Capital Aviation Services (GECAS) has repossessed them. Negotiations are on between the lessor and Air Costa and the latter has stopped taking bookings for a temporary period. The Vice President (Marketing and Brand Communication) Kavi Chaurasia had told the media that a clear picture would emerge soon and the airline would announce when operations would be resumed.

With fund crunch, the airline has reportedly only paid the base slab salaries for January and the promoters, LEPL Group, are trying to clear the dues. The Vijayawada-based group has diversified interests in real estate and infrastructure development.