Tuesday, January 12, 2010

Airlines fly to smaller cities for growth in passenger traffic

India’s airlines are charting new routes to connect neglected, smaller cities that have some tourist or business potential, as the economy brightens and passenger numbers rise. Airlines saw a spurt in passenger traffic, growing by 5.45% to 39.96 million between January and November, according to the regulator Directorate General of Civil Aviation (DGCA). The figure for December is not yet available. The number had contracted as much as 4.84% to 42.85 million in 2008. Kingfisher Airlines Ltd and regional airline Jagson Airlines Ltd are among those planning to harness the potential of smaller airports. “The bigger airlines have a focus on category I (metro) routes by default, but category II routes like smaller capital cities make a lot of sense,” said Jagson CEO Koustav M. Dhar. Jagson plans to take to the skies from February with a 88-seater aircraft and subsequently increase its fleet to four by the end of the year. It will connect Srinagar to Leh with a daily flight starting April. So far, only Air India has a weekly flight between the two cities. “Those (connecting state capitals and smaller cities) are the sectors to be in and they are consistent all year around at Rs4,000-4,500 (average fare),” said Dhar, comparing the average fare on the Delhi-Mumbai route, which can drop below Rs3,000 due to competition. “(However), if you put 180 seats on category II, they are not viable.” Jagson will also connect New Delhi to Shimla and Dharamshala, and operate flights to Ranchi and Patna in summer on alternate days. Kingfisher Airlines, India’s second largest carrier by market share, has started flights between Chennai and the industrial town of Salem in Tamil Nadu, and Jharkhand’s capital Ranchi and Chhattisgarh’s capital Raipur recently. It has also received permission to start services to Uttarakhand’s Pantnagar from New Delhi. Also on the cards are flights to the hosiery and garments hub of Ludhiana in Punjab from New Delhi. A Kingfisher official said the airline is waiting for regulatory clearances before it can take off to Pantnagar and Ludhiana. “Since these are new airfields, DGCA is still to clear them,” he said.National carrier Air India already flies between several small towns in the country.


Drahmesh said...

It is obvious that the losses are increasing year on year. Loses now standing at over 12,000 cr. is not right for the goverment to induce money into a failing company.

If you check on expenditures and salaries of employes....you will notice that most are given a standard salary + an incentive.
For pilots its flying hrs while for engineers its ground hrs.

This incentive works out or rather turns out to be a fixed take home salary even if the employee performs or not. (So y do they call it PLI).

this in comparasion with other airlines.

Air India - Enginers salaries work out 1.2 times the salary of any competitor airline.

Pilots/Commanders salary works out to be nearly 1.75 times the salary of any compitior airline carrier.

Similarly with ground staff.

So its a clear leakage of funds to employess who do no work but take home fat salaries at the end of the month.

They should make it competitive with other airlines.

If they cannot handle the unions, this will lead to a clash and ultimately Air India (NACIL) will eventually have to shut operations or run on goverment grants.

Which is absolutley wrong as the are using tax payers money here.

NACIL should split IA and AI or NACL should shut down.

The faster it shuts down the better as other minister will eventually eat into the tax payers kitty, make more losses...lose more tax money and then shut down. SO the earlier it happens the better.

Tony londra said...

Good blog, Nice work and info for airlines. Thanks for sharing this post.


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