Bangalore sees rush of low-frill airlines

Bangalore sees rush of low-frill airlines
Newer entrants are jumping in the fray, in the arena of low cost airlines. Many of these, like the VRL Group and Air One, are based in Bangalore.
CNBC MoneyControl



As the aviation turf heats up, many new players are jumping into the fray to challenge the majors in the game, and most of them are companies based in the IT city of Bangalore.

Air Deccan's low cost-no frills airline model is being challenged by another Bangalore-based group, United Breweries. Though Kingfisher Airlines will have an operational base in Mumbai, the promoter and group are headquartered in Bangalore. There are also two more new entrants in the bandwagon.

Bangalore-based VRL group has a past record of success in the interstate bus business, but the group now plans to invest Rs 5000 crore (Rs 50 billion) over the next three years and begin an airline service. Sources say, it will be a "medium cost" airline that will initially connect cities in Karnataka with neighboring states. Hubli, a city based in Northern Karnataka, will have the overhauling and anchoring facility.

Another group comprising of five ex-Indian Airlines officials are starting an airline called Air One. The group boasts of using two Embraer aircraft, bought at Rs 32 crore (Rs 320 million), which though are 10 years old, have a safety record that is impeccable. The airline will start operations on August 15, initially connecting Trivandrum to Delhi non-stop, and then cover other such long-haul routes. Their fares will be 25-30% cheaper than normal fares, say sources.

Dr JW Lobo, Promoter, Air One said, "We are expecting to make profits from the first year of operations, though it may be a small profit. As far as the fares are concerned, it is targeted at the business traveler, particularly from the point of view of convenient timings."

While most groups say they chose Bangalore because they were Bangaloreans or Kannadigas, Bangalore's prospering economy and vast disposable income are definitely a factor. Additionally, the IT and BPO industries are definitely giving the domestic aviation industry the much needed wind beneath its wings.