The airline currently has a fleet of seven aircraft which it plans to expand to 10 by the end of 2013 The domestic aviation industry is seeing increased interest from private players post the entry of Tata-SIA and AirAsia in the Indian market, with Alok Sharma promoted Air One applying to the ministry of civil aviation for permission to start a scheduled airline. Air One currently operates charter services to domestic as well as international destinations. Confirming the development a senior official in the ministry of civil aviation said, “They have applied for permission to start a scheduled airline. They want a pan-India license.” He declined to share further details. Calls and text messages to Air One promoter Alok Sharma did not elicit response.
Alok Sharma, the promoter and director of Air One, is a former president of Air Sahara. Industry sources informed Sharma has been mulling floating a new airline for some time to cash in on the latent traffic potential in the domestic market. According to Air One’s website, the airline currently has a fleet of seven aircraft which it plans to expand to 10 by the end of 2013. The airline has a fleet of one Lineage 1000, two Legacy 650s, one Citation XLS, one Dauphin and two Ecureuil. Air One also operates regular charter services between Mumbai and Aamby Valley from October to May. India is currently the one of the most under-penetrated aviation markets in the world. According to data shared by AirAsia Group while releasing financials in Dec, 2012, India has a fleet of around 422 aircraft for a population of 1.2 billion. In comparison, China has a fleet of 1,981 aircraft for 1.3 billion citizens.
CAPA data for 2012 further indicates the number of domestic airline seats per capita is very low in India at just 0.07 compared with 3.35 for Australia, 2.49 for the US, 1.38 for Canada and 1.05 for Japan. With the number of domestic air passengers in the country projected to triple to around 175 million per annum by 2021 from 58 million in 2012, start-up airlines from AirAsia India to Tata-SIA have announced new ventures to tap in on the growth in the market.
Tata Sons tied the knot with SIA to launch a full service carrier in India at an initial investment of $ 100 million on Sep 19. The Tatas will be the driving force in the JV with a 51% stake; SIA would take the rest for $ 49 million.
The Tatas have already entered the low-cost carrier space in February this year after tying up with Tony Fernandes’ Air Asia. However, Tata Sons had made it clear that the airline would be run by Air Asia, which has 49% stake with the Bhatia family controlling 21%.
AirAsia is expected to start operations out of its hub in Chennai by January next year. The airline has said it would not fly to Delhi and Mumbai initially because of high cost of operations at these airports. The Tata-SIA JV Company, in the meantime, has made Delhi its operational hub because of the huge capacity constraints in the Mumbai airport and better infrastructure facilities at the Delhi airport.
Tata-SIA has said it would like to operate international flights from India depending upon government approvals. At present, Indian government rules do not allow domestic airlines less than five years in operations and with a fleet of less than 20 aircraft to commence international operations. The ministry of civil aviation has been reconsidering the policy but no decision has been taken yet.
A start-up airline based out of Vijaywada Air Costa, which commenced operations from Oct 14, too is understood to be keen to apply for a pan-India license for scheduled operations. The Vijaywada-based regional carrier has a fleet of two 80-seater Embraer 170s and will add on eight 119-seater Embraer 190s by end 2014. The airline is looking at investing $ 100 million over the next two years.
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