Singapore Air Show

Indian Scheme Could Boost Regional Air Services

 - January 31, 2018, 6:00 PM
IndiGo’s A320 fleet will be augmented by ATR turboprops for rural service.

India has rolled out a plan designed to encourage rapid growth in transportation services to, from, within, and between its regions. The Indian Ministry of Civil Aviation (MoCA) Regional Connectivity Scheme (RCS), titled “Udan” (Ude Desh ka Aam Naagrik, or “let the common man fly”), has been designed to act as a catalyst for growth as the Indian economy matures. The RCS was launched last year, after two phases of bidding for laid out routes, and now seems well on its way to maturity.

Demand is clearly there­. Already growth in populated metropolitan areas has been spilling over to the hinterlands, opening numerous opportunities for regional aircraft, helicopters, and seaplanes to interconnect remote, underserved, or unserved airports, towns. and cities.

Domestic ticketing is forecast to hit 300 million by 2022 and, given the current lack of infrastructure at airports, the government has started an ambitious scheme to upgrade airfields and airstrips along with offering incentives to encourage operators to start services to unused airports.

Airports Authority of India (AAI), implementation agency for the RCS in aviation, plans to invest $2.6 billion upgrading airport infrastructure by 2020. Otherwise, regional airports' limited daylight opening hours, lack of runway lights, or radars could inhibit growth, the government believes.

However, the key metro airports of Chennai, Bangalore, and Hyderabad are almost at full capacity, while landing slots at Delhi and Mumbai airports have limited availability. “MoCA is not in a position to ensure slots for RCS flight in Mumbai,” confirmed Minister of State for Civil Aviation Jayant Sinha, prompting one analyst to comment that this is “a big setback for Indian regional aviation.”

“India suffers from the classic chicken-and-egg syndrome. Unlike China, we add passenger capacity first and then build infrastructure to cope with the volume,” said Vishok Mansingh, CEO of Mumbai-based consultancy CAV Aero Services. “India follows the wait-and-watch policy; wait for business, cramp, congest, and then plan expansion later,” he said.  

Despite this, the government seems ready to adapt. RCS rules are being altered as lessons are learned along the way. For example, the Directorate General of Civil Aviation will soon introduce industry-friendly regulations for seamless induction for new entrants/existing operators introducing a new type of aircraft. This includes complete initial crew training and release before aircraft import, instant approval of entry-into-service (EIS) trainers, freedom to hire expat trainers and a combined cockpit experience of 300 hours. The regulation is under preparation will be released soon, officials told AIN.

RCS Has Critics

However, many feel changes are to the detriment of operators. “RCS is confusing. Too many changes midway are putting initial operators at a disadvantage,” said Harsh Vardhan, chairman of Starair Consulting. A.N Sharma, airport director of Ludhiana Airport, in the northern state of Punjab, told AIN load factors were touching a high of more than 90 percent as fares are subsidized, compared to the hefty cost of tickets four years ago when the airline withdrew from the destination. He added: “Airlines will need to ensure their credibility by not pulling out of [routes].” 

While the initial plan of RCS was to encourage charter operators to join the fray, regulatory requirements, along with a lack of finance and a lack of confidence, have resulted in scheduled airlines entering the arena. One exception is Supreme Airlines, a charter airline flying short regular routes interstate in the state of Rajasthan. Having started operations before the RCS came into being, Supreme is supported by the state using capital Jaipur as its base, while connecting to second- and third-tier cities using its two Cessna 208 nine-seat single-engine Caravan turboprops, according to vice president and founder, Akash Agarwal. He said plans are in the offing to expand the network. Rajasthan is thus the first to introduce a state-subsidized service. “These flights will be useful not just for tourists but also for students,” said Vasundra Raje, the state’s chief minister.

Meanwhile, in an unprecedented change from its stringent single business model of procuring only Airbus A320 family aircraft, IndiGo, India's largest budget carrier, has ordered 78-seat ATR72-600 turboprops, operations of which have started already. “We expect to get 20 ATRs by January 2019,” said Aditya Ghosh, president of IndiGo.

Another large budget carrier, SpiceJet, has also announced orders for 25 Bombardier Q400 turboprops. “SpiceJet operates India’s largest regional fleet and has always been a firm believer in the growth story of India’s smaller towns and cities,” said  SpiceJet chairman Ajay Singh. “We have worked hard over the years to put these on the country’s aviation map,” he noted.

Helicopters’ Turn

For the first time, helicopters are being included under RCS for “priority” areas that will include eight northeast states, three mountainous northern states and the remote islands of Andaman and Nicobar, and Lakshadweep. “If we do not encourage helicopters, connectivity to priority areas will never be done,” said Sinha.

Helicopters will bring benefits in the difficult terrain and harsh weather conditions of the northeast. Already, Advanced Indian Air Force landing sites are being opened for joint military-commercial use. “These will be part of the RCS and bring respite to the population,” said D.K Kamra, regional executive director of AAI. 

A major challenge for helicopters operating under the RCS is the current rules require multi-engine aircraft. “If a single-engine aircraft is good to operate as a charter, why not under the RCS?” asked Rohit Kapur, president of India’s Business Aircraft Operators Association (BAOA). Kapur said he hopes the third stage of RCS bidding will include the need to fill the gap between the 70-/80-seaters (ATRs and Q400s) and the 10-/15-seaters. “This is where the excess capacity of our charter operators can be used,” Kapur concluded.

Kapil Kaul, CEO of the Centre for Asia Pacific Aviation India, is not optimistic. “Unless airport infrastructure is developed, RCS can never take off.” Others, such as Boeing, are “still gauging how regionals will pan out,” said Dinesh Keskar, the airframer's senior vice president, sales, Asia Pacific and India. He added that the RCS would open new regional routes for aircraft, including Boeing’s 737 narrowbody. “We are very bullish that if it [RCS] works out, we will be one of the beneficiaries,” he told AIN.

RK Bali, managing director of BAOA, had the final word: “Udan is a national mission. Let’s give it some time, as there has been total transparency on part of MoCA on this.”