Singapore Air Show

The Rise Of India’s Regional Carriers

 - February 13, 2012, 11:15 AM

A growing appetite among Indian carriers to serve regional routes makes the country a potentially big market for 250 regional jets with a capacity of up to 120 seats, according to Brazilian airframer Embraer. Twin-turboprop manufacturer ATR estimates in the next five years India will requirearound 100 aircraft,and 200 in the longer term.

Despite SpiceJet having selected 15 Bombardier Q400s, more than 80 percent of regional turboprops flying or on order in India are ATRs. With fuel in India more expensive than the world average, regional carriers are facing increased operating costs and many of the country’s provincial airports have relatively short runways, which can constrict jet operations.

ATR is soon to make an announcement about a new Indian MRO provider. The manufacturer already has a customer support center and warehouse in Singapore and training facilities in Bangkok.

In India, around 250 low- to medium-density routes remain unused, as they are not profitable to run with narrowbody jets. Beyond the major Indian cities, 133 routes have less than one frequency a day. “This doesn’t provide adequate frequency to passengers,” said Alex Glock, Embraer’s airline market vice president for the Asia Pacific region. “No wonder other forms of transport are used such as first-class rail with fares of air travel [being so high].”

In India’s smaller cities, where populations tend to be in the millions, the Q400 will shake up the transport market, said SpiceJet chief executive Neil Mills. “We’re flying to airports that lack suitable infrastructure and are incapable of handling narrowbodies,” he said. “We are a low-cost carrier that is flying into regional markets. If I could have flown into some of these smaller markets with a Boeing [737] and kept the business simple, that’s exactly what I would have done. I can’t because of infrastructure constraints, so I needed a different machine.”

But Mills conceded that testing these new routes could prove to be hit or miss. Initially, SpiceJet will test the Q400s on a limited number of city pairs and will withdraw the aircraft from routes that are not working.

SpiceJet operates a fleet of 30 Boeing 737-800s and 737-900ERs. It recently announced an order for 30 B737-800s, fitted with winglets.

As numerous regional airlines start to get ready to launch operations, Bengaluru-based Regional Airport-Holdings International (Rahi) said it will concentrate its business on regional airports even as it firms up its business plan for a new air taxi operation. With the first movement at Gulbarga–one of the two airports in the south of India under construction by Rahi– planned for May 1, the group’s founder-chairman Umesh Kumar Baveja, is optimistic about long-term growth prospects. “We are looking at serving hinterlands rather than the [metropolitan areas],” he told AIN. “Rahi may acquire half of the 99 airports we plan to operate by 2025. This is not ambitious given that ministry of civil aviation has plans to set up 500 airports by 2020.”