Low-cost domestic air carrier Air Deccan is set to restart operations with the first flight in its second inning scheduled for December 22. The carrier will also bring back its trademark Re 1 airfares, a model that helped it garner massive popularity in its heydays.
The airline was founded in 2003 by G.R. Gopinath and merged with Kingfisher Airlines in 2008. Kingfisher later stopped operations due to financial constraints. The revival of the low-cost carrier will see it operating from four bases — Delhi, Mumbai, Kolkata and Shillong. From these hubs, it will connect to other smaller cities.
The first flight will take off on December 22 from Nashik to Mumbai. The airline will start flight operations under the Regional Connectivity Scheme (RCS), also called the Ude Desh Ka Aam Nagrik (Udan) scheme. The Centre launched Udan scheme to ensure more people would adopt flying as a mode of transport, increase connectivity to smaller cities, and give a fillip to the aviation sector.
Udan places a cap on airfares at Rs 2,500 per passenger for a flight stretching up to an hour to tier-2 and tier-3 cities while subsidising flying for keeping the airfares low. The Re 1 airfare will be offered to a few people initially and later the fares will be set in the regular low-cost price range. Gopinath worked for several years to revive the airline and won rights to fly several routes under Udan.
In the book ‘Strategic Management and Business Policy’ by Azhar Kazmi, Gopinath laid out how he envisioned the low-cost airline for the common man.
“It is not the elite that I consider as my customers. It is the humble cleaning women of my office, the auto-rickshaw driver and other such people that we would like to cater to. We want them to dream that they too can fly, and we want to make that dream happen.”
The airline will charge Rs 1,400 for a 40-minute flight, for instance the Nashik-Mumbai will draw this fare. Initial operations will cater to cities such as Mumbai, Nashik, Pune and Jalgaon. By January 2018, Air Deccan will start operating from its second base airport in New Delhi. This will connect nearby cities like Agra, Shimla, Dehradun, Kullu, Shimla etc.
Two aircrafts of the carrier will operate from Kolkata to connect the base to places like Jamshedpur, Rourkela, Durgapur, Bagdogra, Burnpur, Cooch Behar and Agartala. The Shillong base will be connected to Imphal, Dimapur, Aizawl and Agartala. The carrier will operate the Beech 1900 D 19-seater aircraft. It has inducted three into its fleet and two are expected to be added by January.
In March, the RS bidding awarded rights for 128 routes. Air Odisha was awarded 50, the highest in the bidding, followed by Air Deccan which secured rights to 34 routes. The other winners in the bidding were Alliance Air, Trujet and SpiceJet. After the bidding, there was a six-month deadline set for airlines to start operations. Air Deccan is already past the September 30 date. Out of the 128 routes that were bid, only 15 are operational.
When Air Deccan started off, its no-frills business model with the innovative approach to pricing caused a ripple effect in the industry. At its start in 2003, it had two ATR42-320 aircraft. It purchased two Airbus A320-200s and leased five more such aeroplanes in 2004. The same year in December, the airline ordered 30 more such aircraft in a $1.8 billion deal and in February 2005 placed an order for 30 ATR 72-500.
After huge growth in its nascent years, by 2006, it was the third larger carrier in India and held a 19 per cent market share. It flew to 55 destinations and had 30 aircraft in its fleet. It placed orders for another 30 A320s in December 2006 and became the country’s second-largest carrier in 2007.
Air Deccan’s success had sparked the emergence of low-cost carriers like IndiGo, GoAir, SpiceJet and JetLite. All of these airlines were launched between 2005 and 2007, the most successful period of Air Deccan.