Ready to Take Off

Regional aviation is experiencing a resurgence thanks to the Udan scheme. However, airlines are likely to face air pockets

- Yuthika Bhargava

In Jalgaon—a city of over 6 lakh people in northern Maharashtra, about 388km from Pune and 412km from Mumbai—air travel wasn't always an option, even though an airport was built there in 1973. For businessmen like Rishab Jain, who runs a company with interests in chemicals, pharma and agriculture, this gap meant relying on slower, less convenient modes of transport.

“Before air services started, we mostly relied on trains to travel to Pune or other parts of Maharashtra,” says Jain. “It was not only inconvenient for us, but also for clients—especially foreign clients who wanted to visit our manufacturing plants.”

For flyers in smaller cities there is good news. At least three new airlines—Shankh Air, Air Kerala, and Alhind Air—are on the tarmac ready to launch operations this year.

Flying to Far Corners

Bringing connectivity to Tier-II and Tier-III cities has been one of the thrust areas of the Narendra Modi-led government under the Ude Desh Ka Aam Nagrik (Udan) scheme, or Regional Connectivity Scheme (RCS), launched in 2016.

Despite the history of more than half a dozen failed ventures, regional aviation seems to be experiencing a resurgence. A regional airline can operate anywhere in the country; however, it cannot fly between two metro routes.

Shantanu Gangakhedkar, senior consultant and airports lead at Frost & Sullivan, a consultancy, says that India has one of the largest domestic aviation markets globally and as India’s GDP increases so will the passenger demand with India's domestic air passenger traffic expected to be more than 300mn by 2030.

“But the key question is, is the demand constant and is the paying capacity high enough to offer strong profitability to airlines especially for regional airlines. If the load factor is low and if the profit is too thin it makes it very challenging for airlines,” he says.