Alliance Air, the regional arm of Air India, is likely to sign a pact soon for leasing 10 new turbo-prop planes as the airline plans to fly to smaller towns under the government’s proposed regional connectivity scheme.
The state-owned regional airline is at the “final” stages of negotiations with lessors to lease these planes, a source close to the development said.
With two major domestic players not evincing much interest so far in the ambitious regional connectivity scheme (RCS), the government is pinning its hopes on the flag carrier to make it a success. The civil aviation ministry, however, is still working on the final contours of RCS.
“The negotiations with the lessors for leasing of 72-seater 10 ATR planes are at final stages and we expect to sign a deal soon,” the source said.
A wholly-owned subsidiary of Air India, Alliance Air operates 39 point-to-point air services daily to 34 cities from its six base stations — Delhi, Kolkata, Mumbai, Hyderabad, Bengaluru and Bhopal — with the majority of them being tier-II and tier-III cities. It currently has 10 ATRs in its fleet. Two of them are 42-seater ATRs.
“We aim to have 14 ATRs in our fleet by March next year. As part of this, we will be inducting six new 72-seater ATRs between December this year and March 2017. Some of the 42- seater ATRs are also expected to be phased out during this period,” the source added.
In January this year, the airline had floated bids for leasing of the twin turbo-prop planes for 12 years. This was part of plans to further penetrate into unserved and under-served routes as well as to switch to a single-model fleet.
RCS seeks to provide air services between unserved and under-served areas and is part of larger plans to boost the domestic aviation sector, which is clocking over 20 per cent passenger growth over the last several months.
The government expects the first flight under RCS, which is at advanced stages of finalisation, to take off in early January 2017.
There are 394 unserved and 16 under-served airports. State-owned AAI had recently said as many as 20 un-utilised airports are ready to start operations for regional flights.
A slew of incentives have been proposed under RCS, including Rs 2,500 cap on airfare for one-hour flights.