<p>Bengaluru: Most consumer-facing sectors are betting big on India’s tier II/III cities. After a hesitant start, Indian aviation too is finally getting there, it seems, with four players already in and two more waiting in the wings. Bengaluru-based Star Air boasts a compounded annual growth rate (CAGR) of 50 per cent since it took off with its first flight in January 2019. Today it is busy adding to its fleet and routes, with an eye on becoming a feeder service for the exponential growth Indian aviation has been prepping for in the coming years. </p>.<p>The Sanjay Ghodawat Group-run airline presently operates 48 flights (on 24 sectors) with a fleet of eight Embraer (five E145 and three E175). It plans on expanding this fleet to 14 by the end of 2024. In fact, its fourth 76-seater E175 will be inducted early next month. More remarkably, by the end of this calendar, it is looking to add 40 routes to its itinerary, leaning on the government Ude Desh ka Aam Nagrik (UDAN) 5.0 scheme.</p>.Star Air launches flight between Bidar and Bengaluru.<p>At a time when most Indian airlines are falling shy of profits, Star Air officials seem particularly gung ho about their bottomline. “Since we commenced our operations, we have been in green, and this year (FY24) too we are expecting to close in green,” Simran Singh Tiwana, chief executive officer of Star Air, told <em>DH</em> in an exclusive interaction. He further stated that the airline has been seeing an average load factor of 80 per cent of its capacity in the years of its operations. However, on the grounds of being a private (read unlisted) entity, he refrained from divulging the actual financials of the airline. </p>.<p>India is expecting to become the second-largest market (in terms of domestic travel) by 2027. Most of the big players, be it Air India, Indigo or Akasa, have unveiled grand expansion plans with major aircraft orders. “A whopping 65-70 per cent of the Indian population is rural. The 30-35 per cent of people living in the metros cannot fill up those planes,” Tiwana argued. And that is where he is counting on the criticality of airlines such as his to mobilise traffic from the tier II/III cities and their rural fringes. The airline sees on average about 1200 UDAN passengers flying on a daily basis.</p>.<p>He draws inspiration from the role played by smaller carriers in the US, ferrying passengers from smaller cities to hubs, feeding the larger airlines operating there. Star Air too has been getting queries from transit passengers from smaller cities eyeing foreign destinations. “As much as we want to serve these passengers, we are unfortunately unable to do it as we do not have tie-ups with any bigger airlines,” Tiwana rued. He is, however, optimistic that the situation will change as the Indian aviation industry evolves. Star Air, itself, is pursuing codeshare agreements with larger Indian airlines to enable this, he added.</p>.<p>Confident of the profile of his airline, Tiwana waved off any suggestion to go beyond serving the market it has chosen to. “We are strictly a regional carrier and do not intend to enter the markets where larger airlines are already operational. We are targeting a sub-100 passenger market and our focus is limited to growing aviation demand in tier-2 and 3 cities,” he categorically pointed out. Presently, 15-20 per cent of Star Air’s customers are first-time flyers.</p>.<p>There is more passenger traffic coming out of tier II/III cities of the country, though the metros such as Delhi, Mumbai, Bengaluru, Chennai and Kolkata continue to constitute 60 per cent of the traffic, say several industry observers. The UDAN scheme seems to have finally taken off, it appears, at least where airlines are concerned. Star Air already has competition in Alliance Air, FlyBig and IndiaOne Air, while two others - Jettwings and Fly91 - are yet to start operations. </p>.<p>Thriving on regional connectivity, Star Air’s biggest markets have been in Belgaum, Kolhapur, Jamnagar, Gulbarga and Bidar. It is next deepening its presence in the northwestern part of the country with 9 new stations in Gujarat and Rajasthan. It connected Kolhapur with Bengaluru on October 15. Next is Pune-Ajmer starting October 29. Then, Shivamogga-Hyderabad, Goa (Mopa)-Tirupati will take off on November 21, followed by Ahmedabad-Diu and Goa-Diu in January. Hindon, Mundra and Nanded are other upcoming destinations.</p>.<p>The biggest challenge for the airline in making projections is the unavailability of historical data. “We consider factors such as density of younger population, presence of educational institutions and connectivity through overnight buses and trains. We rely on data from buses and trains to get a sense of load and routes to pick. A fair part of the decision is also guesswork. But what gives us the confidence to do that is the assurance that some part of our operational cost is guaranteed by the UDAN scheme,” Tiwana explained.</p>
<p>Bengaluru: Most consumer-facing sectors are betting big on India’s tier II/III cities. After a hesitant start, Indian aviation too is finally getting there, it seems, with four players already in and two more waiting in the wings. Bengaluru-based Star Air boasts a compounded annual growth rate (CAGR) of 50 per cent since it took off with its first flight in January 2019. Today it is busy adding to its fleet and routes, with an eye on becoming a feeder service for the exponential growth Indian aviation has been prepping for in the coming years. </p>.<p>The Sanjay Ghodawat Group-run airline presently operates 48 flights (on 24 sectors) with a fleet of eight Embraer (five E145 and three E175). It plans on expanding this fleet to 14 by the end of 2024. In fact, its fourth 76-seater E175 will be inducted early next month. More remarkably, by the end of this calendar, it is looking to add 40 routes to its itinerary, leaning on the government Ude Desh ka Aam Nagrik (UDAN) 5.0 scheme.</p>.Star Air launches flight between Bidar and Bengaluru.<p>At a time when most Indian airlines are falling shy of profits, Star Air officials seem particularly gung ho about their bottomline. “Since we commenced our operations, we have been in green, and this year (FY24) too we are expecting to close in green,” Simran Singh Tiwana, chief executive officer of Star Air, told <em>DH</em> in an exclusive interaction. He further stated that the airline has been seeing an average load factor of 80 per cent of its capacity in the years of its operations. However, on the grounds of being a private (read unlisted) entity, he refrained from divulging the actual financials of the airline. </p>.<p>India is expecting to become the second-largest market (in terms of domestic travel) by 2027. Most of the big players, be it Air India, Indigo or Akasa, have unveiled grand expansion plans with major aircraft orders. “A whopping 65-70 per cent of the Indian population is rural. The 30-35 per cent of people living in the metros cannot fill up those planes,” Tiwana argued. And that is where he is counting on the criticality of airlines such as his to mobilise traffic from the tier II/III cities and their rural fringes. The airline sees on average about 1200 UDAN passengers flying on a daily basis.</p>.<p>He draws inspiration from the role played by smaller carriers in the US, ferrying passengers from smaller cities to hubs, feeding the larger airlines operating there. Star Air too has been getting queries from transit passengers from smaller cities eyeing foreign destinations. “As much as we want to serve these passengers, we are unfortunately unable to do it as we do not have tie-ups with any bigger airlines,” Tiwana rued. He is, however, optimistic that the situation will change as the Indian aviation industry evolves. Star Air, itself, is pursuing codeshare agreements with larger Indian airlines to enable this, he added.</p>.<p>Confident of the profile of his airline, Tiwana waved off any suggestion to go beyond serving the market it has chosen to. “We are strictly a regional carrier and do not intend to enter the markets where larger airlines are already operational. We are targeting a sub-100 passenger market and our focus is limited to growing aviation demand in tier-2 and 3 cities,” he categorically pointed out. Presently, 15-20 per cent of Star Air’s customers are first-time flyers.</p>.<p>There is more passenger traffic coming out of tier II/III cities of the country, though the metros such as Delhi, Mumbai, Bengaluru, Chennai and Kolkata continue to constitute 60 per cent of the traffic, say several industry observers. The UDAN scheme seems to have finally taken off, it appears, at least where airlines are concerned. Star Air already has competition in Alliance Air, FlyBig and IndiaOne Air, while two others - Jettwings and Fly91 - are yet to start operations. </p>.<p>Thriving on regional connectivity, Star Air’s biggest markets have been in Belgaum, Kolhapur, Jamnagar, Gulbarga and Bidar. It is next deepening its presence in the northwestern part of the country with 9 new stations in Gujarat and Rajasthan. It connected Kolhapur with Bengaluru on October 15. Next is Pune-Ajmer starting October 29. Then, Shivamogga-Hyderabad, Goa (Mopa)-Tirupati will take off on November 21, followed by Ahmedabad-Diu and Goa-Diu in January. Hindon, Mundra and Nanded are other upcoming destinations.</p>.<p>The biggest challenge for the airline in making projections is the unavailability of historical data. “We consider factors such as density of younger population, presence of educational institutions and connectivity through overnight buses and trains. We rely on data from buses and trains to get a sense of load and routes to pick. A fair part of the decision is also guesswork. But what gives us the confidence to do that is the assurance that some part of our operational cost is guaranteed by the UDAN scheme,” Tiwana explained.</p>