Air Costa to add 8 aircrafts in the next 2 yrs to support pan India foray

The Airline has reduced expenses and optmised costs and thus reported operating profits in December

Andhra Pradesh-based regional airline Air Costa to add eight aircrafts before 2016 to its existing four aircrafts. The airline, which reported an operating profit in the month of December, 2014 for the first time, said that it will be a pan-India player by the end of 2015.

Vivek Choudhary, chief financial officer, Air Costa, who is in Singapore to finalise lease agreement for three fleets immediately, said that the Airline made an operating profit of Rs 1.5 crore in December 2014 and this is the first time Air Costa is posting a monthly operational profit. The company has clocked over Rs 40 crore as flown revenue in December.

He said reasons behind the Airline to report profit include focussed sales strategy coupled with revenue management and marketing initiatives and also the healthy seasonal demand. "We played to our network strength," he said.

"The quarter as a whole has been fruitful and Air Costa is slowly sustaining and establishing itself as a strong regional airline with focus on providing regional connectivity. We have a positive outlook and look at stabilising our revenues and costs," said Choudhary, noting that the company reported a load factor of 80% in December, while for the quarter it reported 77% load factor.

He added, the Airline also reduced its expenses and optmised the cost, which it said it would continue to do.

On the outlook he said, while January will be a good month, February, March and April are expected to see some low demand considering it is time for exams. "We are hoping that May and June will be a best month again."

The Airline also plan to add four Embraer Jets (E190) aircrafts in 2015 and in 2016 each to support its foray into other parts of the country.

"We will soon be able to start pan India operations. Our focus will be tier II and III cities and inter connection services. We are not here to compete with players like Indigo or Jet," said Choudhary, who is in Singapore currently to finalise the deal for three fleets.

To a question on whether the Airline looking for an investor, he said, "we are actively exploring opportunities for raising funds and are seriously engaged in discussions at the moment. No plans of listing in the near future. We will, when we have critical mass and opportunity is right".

According to The Flying Engineer, an online portal which tracks aviation industry, "The airline flies 34 flights a day between 15 city pairs, connecting 9 stations with four Embraer E Jets - two 112 seat E190s and two 67 seat E 170s. Of these, the airline enjoys a monopoly on three pairs: Jaipur-Chennai, Tirupati - Vishakhapatnam, and Vijayawada-Vishakhapatnam sectors, and a duopoly on five others. On the other sectors, the airline enjoys competition from just two other airlines." 

Air Costa is the first regional airline of South India promoted by the formidable LEPL group founded by L P Bhaskar Rao. The airline started in October 2013.