Despite apprehensions regarding availability of demand in tier III and tier IV cities, the regional connectivity scheme (RCS) seems to have taken off well for SpiceJet, Alliance Air and TruJet — three operators that have started operations under the scheme. Alliance Air — a wholly owned subsidiary of Air India — was the first operator to start operations. It was followed by TruJet and SpiceJet.
According to Ajay Singh, chairman and managing director of SpiceJet, occupancy on routes on which the airline started operations, has been more than 90% and it has broken even. As of now, SpiceJet operates on routes such as Mumbai to Porbandar, Mumbai to Kandla, Hyderabad to Puducherry. Operations on the Jaipur- Jaisalmer route will commence from October 29.
For Alliance Air, too, the load factor has improved over the last six months on various RCS routes since it started operations from April. According to a senior executive of the airline, the occupancy levels on the Delhi-Shimla route is around 75%, while on its way back from Shimla, the load factor is around 90% as the number seats available is just 14.
On other routes such as Delhi to Bhatinda and Pant Nagar, load factors are mostly around 75% during holidays, festival periods and weekends. Being a manufacturing hub, Pant Nagar attracts a lot of traffic.
“From April, we have made good improvement in load factors on the routes we operate under the RCS scheme. In September, which was a lull month for airlines, occupancy levels slipped below 70%, but from the end of September and beginning of October, load factors have again been at 75% and sometimes little more. Though yields are under pressure, we hope after a year it would stabilise,” said the executive.
TruJet is the only regional airline to have started operations under the RCS scheme and has also bid for new routes in the second round of bidding. The Hyderabad-based airline recently launched operations on the Chennai-Mysore and the Hyderabad-Kadappa routes.
According to a senior executive of the airline, the load factor on the Chennai to Mysore routes is around 75%, while the same on the Hyderabad to Nanded route registers 67% on average. The occupancy levels on the Hyderabad to Kadappa route is around 65%, which is substantially better compared to when the operations were launched. The recently launched Hyderabad to Vijaynagar route also reports 70% PLF.
“The load factors are improving with each passing day. September was a lean month but October has seen a pick up in load factor. We are also looking to acquire more ATR aircraft for expanding operations,” the executive said.
TruJet has almost reached a deal with Jet Airways to acquire four ATR-72 aircraft on lease while the airline wants to induct all the 15 ATR-72 aircraft owned by Jet Airways in the next fiscal.
“We plan to get all the ATR aircraft of Jet Airways since we would need more capacity for our expansion in the near future. The deal for four aircraft is in the closing stages. We have bid for routes in the second round as well and so capacity will be required,” explained the TruJet executive.