UDAN: Truejet, Alliance Air set to spread wings; check out the fares structure

Occupancies on the first of the UDAN routes, Delhi to Shimla, are nudging 100%, with apple traders, employees of the Indian Statistical institute (ISI) and tourists making use of the new service. In contrast, passenger loads on the other two Udan routes, operated by TrueJet, are around 60% currently, company sources said. The average uncapped fare on the Simla-Delhi route, which was around Rs 17,000-Rs 18,000 when operations kicked of on April 27, have come down to levels of Rs 15,000.

The capped fare from Delhi to Simla is Rs 2,304 and the government provides a subsidy of Rs 3,340. Alliance Air, a subsidiary of Air India, offers 48 seats from Delhi to Simla and 15 on the return flight. The subsidised fare on the Hyderabad – Cuddapah route is Rs 1,920 and the subsidy received by the airline is Rs 3,402; on the Cuddapah – Hyderabad route the fare is Rs 2,000 while the government funds a subsidy of Rs 3,456.

For the Nanded – Hyderabad route the current fare is Rs 1,610 and the subsidy provided is Rs 3, 060. “The uncapped fares are not too high since we want to generate demand. We hope to increase the occupancy on these routes in the next six months,” an executive from TrueJet told FE.

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Both Alliance Air and TrueJet plan to add routes and acquire more ATR aircraft. Alliance Air will start its operations on Delhi – Gwalior, Gwalior -Indore and Indore – Mumbai route from May 31. TrueJet will acquire two ATR 72-500 and one ATR 72-600 aircraft in the coming month to expand its fleet to seven ATR aircraft.

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True Jet will look to start its operations on the Nanded – Mumbai, Hyderabad – Vidya Nagar, Chennai- Mysore and Chennai Salem routes before September, according to senior officials. It will also acquire three more aircraft in the coming months. “We needed some approvals from DGCA for operating on some of the routes and the runway in Salem airport also needed expansion,” said a senior official of True Jet.

Under the the Regional Connectivity Scheme (RCS) scheme 50% of the seats are subsidised and rest are priced on the basis of the prevailing demand. As a result the average fare on the Delhi – Shimla route is around Rs 15,000 (one-way) while on the Hyderabad to Cuddapah or Nanded route, the average fare (without the subsidy) is in the range of Rs 2,500- Rs 3,000.