There indeed is potential and a growing appetite from airline operators in India to connect routes previously considered unviable. This transformation has come about as regional jets have positioned the economic viability of operating jets with capacities ranging from 70 to 150.

Globally, low cost carriers (LCCs) are emerging stronger by the year and one of the attributes has been the judicious mix of aircraft. Regional aircraft, both jets and turboprops, form part of their fleet, and that seemingly has proved a winner. It is not that regional jets are made only for LCCs. They do form part of the full-service carriers which have used them effectively as feeder service. And there are LCCs which have gone laughing to the banks with narrow-body aircraft and the shining example is that of Air Asia which operates the Airbus family.

The script in India is also similar—LCCs outperforming the full-service carriers, thanks to the opportunities it finds from trunk and non-trunk routes, calling for “right sizing” of fleet. With the passenger growth forecast showing enormous promise in the emerging markets, India leads the way with the opening up of new routes, particularly connecting tier II and III cities. Airlines are announcing route expansion plans and in accordance, aircraft purchases are reaching phenomenal levels.

India’s growth will be low-cost fare driven, contributing over 70 per cent of the passenger traffic. In 2009, of the 44 million passengers on domestic routes about 27 million passengers (over 60 per cent) were on the low-to-medium density markets (Tier II and III destinations), thus throwing open enormous business opportunities for regional jets. About 17 million passengers were from 24 city pairs across seven major metro cities (Tier I).

Gurgaon-based budget airline SpiceJet has announced that it would tap considerably into the growing regional market with an order of 15 Bombardier Q400 turboprop aircraft that can seat up to 80 passengers. The deliveries are expected to commence sometime this year. SpiceJet has options of buying 15 more of the aircraft. SpiceJet which has a fairly strong route network in the north intends now to focus on the south, most probably keeping Hyderabad as a hub. Neil Mills, CEO of SpiceJet has said that the airline would use the regional operations to carry the feeder traffic for the onward journeys including international legacy carriers.

Mills quoting in the media said, “Low cost airlines have already taken over the feeder traffic passenger chunk for onward journeys. Legacy carriers cannot deliver at the prices at which low cost airlines can on the smaller city network.”

Not just SpiceJet, almost all the LCCs in India understand the routing strategy of connecting non-metro, tier II and III cities to the metros. Unless the mix is worked out, the airline will run into turbulence as in the case of Paramount Airways which operated two Embraer jets between non-metro cities. Troubled airline Paramount Airways which is expected to resume operations this year has also placed orders for eight Q400. Meanwhile, Jet Airways has also strengthened its regional operations, while IndiGo which made history with order of 180 Airbus aircraft intends to start a regional airline.

There indeed is potential and a growing appetite from airline operators in India to connect routes previously considered unviable. This transformation has come about as regional jets have positioned the economic viability of operating jets with capacities ranging from 70 to 150. There is a growing mix of aircraft capacities as airlines discover that there are over 200 routes having low-to-medium density of traffic which need to be tapped. Operating narrow-body aircraft on low-to-medium density routes have largely been unviable, leading to closure of some destinations. As per the Ministry of Civil Aviation, there are 62 regional aircraft with scheduled operators and this number could go up as and when the new players take off.