Air Costa will be profitable by March 2015: Ramesh Lingamaneni

Written by Rhik Kundu | Mumbai | Updated: Apr 2 2014, 22:15pm hrs
Air CostaIn February, Air Costa inked a deal for 50 jets worth $2.94 billion with Embraer SA of Brazil.
Forty two-year-old Ramesh Lingamaneni is the chairman of the country's latest commercial airline, Air Costa. The Vijayawada-based airline, his brainchild, currently flies from its base to cities like Ahmedabad, Bangalore, Chennai, Jaipur, and Hyderabad. However, Lingamaneni plans for a pan India presence by the end of the year and has already placed orders with Brazil's for Embraer SA for 50 E-Jet E2 planes, estimated to be priced at about $2.94 billion, with purchase rights for an additional 50 jets.

An excerpt from the interview.

In February, Air Costa inked a deal for 50 jets worth $2.94 billion with Embraer SA of Brazil. What is the plan ahead for you

Air Costa has become the first customer of E-Jet E2s in the Indian Aviation market. We will have 8-10 aircraft delivered by March 2015 and plan to add four aircraft every year one aircraft each quarter until 2018 when the new order joins.

Are you looking to expand your operations in India

We are planning to expand our operations by March, 2015. Our strategy is to serve the Tier II and III cities and connect them to the Tier I cities. At present, since we hold regional operator license, we cant connect major metros or tier I cities. But, we plan to get Pan India Permit before this year end.

Several regional airlines like MDLR, Jagson, King Air and Star Aviation have found survival tough in an industry which has incurred huge losses every quarter for the past few years.

What is your strategy to survive in this market

Our research and analysis convinced us there is wide scope for development in trade and commerce at Tier II & Tier III cities, which has been lacking proper air connectivity. So, we connected these markets with our services. We believe that running a successful airline is no different from any other business. Our strategies have involved robust planning, timing the launch, long term vision and sustainability.

What cities do you currently fly to What are the new destinations you are looking to connect

Currently, we fly to Ahmedabad, Bangalore, Chennai, Jaipur, Hyderabad and Vijayawada. We are connecting to Visakhapatnam, Coimbatore and Madurai in our summer schedule.

What's the current size of your fleet and how many flights do you operate on a daily basis

Our fleet comprises of the contemporary two Embraer E-170 and two E-190 aircraft. As of now, we are operating with 18 flights connecting seven sectors.

You had earlier said that you will go in for an an Initial Public Offering (IPO) three years after turning profitable. When do you envisage yourself turning profitable

We will make profits by March, 2015. As for the IPO, we would be able to comment better on this a year from now.

Since your launch in October, what has your average load factor been like

We have seen impressive growth in passenger load factors since our launch. The average load factor has been 70 % to 75 % for October-February period.