With metros having developed and international airports, the next big opportunity in the air

travel space is the regional cities connecting these metros. Relying on airports in small towns and

the increasing income levels of people in these cities, there is a huge scope for operating a

regional airline profitably. The factors that would favor the regional airline include:

Presence of one metro / hub

Airport infrastructure in tier 1 and tier 2 cities

GDP per capita of the region / Income levels of the people

Reasonable demand for these destinations

Alternative modes of transport present

The western region in India is analyzed across these dimensions.

The Western Region:The western region of India consists of states of Goa, Rajasthan, Gujarat and

Maharashtra. It is a highly industrialized region with large percentage of urban population.

Presence of metro / hub:Presence of a metro city or a hub is essential for regional airlines as the airline can act as a

feeder network to the hub. Also most of the traffic the regional airlines attract will be from the

tier 1 and tier 2 cities to these metros. Western region has advantage of having such cities, with

Mumbai and Ahmedabad being the major ones with International airports. Other major cities in

the region that can act as potential hubs include (Wikipedia, n.d.):

Cities with International Airports:

Mumbai

Nagpur

Jaipur

Ahmedabad

Goa

Other Potential Cities:

Pune

Vadodara

Surat

Aurangabad

Nashik

Airport infrastructure in tier 1 and tier 2 cities:Apart from these hubs, the region also has lot of operational air strips, with Maharashtra

itself having 31 air strips, followed by Gujarat with 13 and a total of 54. The region also is

assessable to operate in nearby cities like Indore, Bhopal which are important cities in Madhya

Pradesh. Apart from the current air strips there are proposed and coming up International and

Domestic airports in the region.

New Pune International Airport

The New Pune International Airport is a Greenfield project being developed to serve

the Metropolitan area of Pune. It is expected to be operational in 2 years.

Shirdi Airport

The State Government of Maharashtra in order to promote tourism in the region has

planned the airport which attracts a lot of tourists due to its religious importance.

Navi Mumbai International Airport

The Navi Mumbai International Airport is a proposed Greenfield international airport

to be built in the Mumbai Metropolitan Region in India. The project is aimed at

easing the air traffic congestion at Mumbai’s Chhatrapati Shivaji International

Airport.

Fedara International Airport:

The International Airport is being planned to be constructed near Ahmedabad in

Gujarat. The airport is being constructed due to the limitations of expansion in the

current Ahmedabad airport.

Ankleshwar Airport:

The airport is being constructed on National Highway 8 near Ankleshwar, Gujarat. It

was planned to serve the industrial areas of Ankleshwar, Bharuch, Jagadia and Panoli.

Also there is a planned Petrochemical Investment Region coming up in the region and

the airport is expected to serve the traffic that is generated due to the developments

coming up in this region.

With the coming up air ports and the present set of operational airports, the region satisfies the

criteria of having the required airport infrastructure to run a regional airline.

GDP per capita of the region / Income levels of the people:The region also has two states that have highest per capita income of people. Maharashtra

is the highly industrialized state with GDP contribution among the states of India. When

considered the Per capita GDP, Goa is the highest with greater than 2 Lakh INR per annum. Also

Gujarat and Maharashtra fall under the 1 to 1.5 Lakh bracket.

The region generates 24% of the national GDP of the country, with an annual growth of

14.5%. The largest share of this GDP is coming from services which also shows the high income

levels of people. The following table shows the demographic indicators of West India, when

compared to Nation (Wikipedia, Western India, n.d.).

Economic and demographic indicators

Parameter West India National

Per capita net state domestic product (SDP) 122569₹  (US$1,900) 73500₹  (US$1,100

)

Percentage share in total 24 NA

Average annual growth of GDP 13.66 8.5

Percentage of population below poverty line 8.66 26.1

Percentage of urban population 46.75 31.16

Percentage of households with electricity 93.6 67.3

Literacy rate 83.2 74.04

Demand drivers for the region:Maharashtra and Gujarat are among the most industrialized states of India while

Rajasthan and Goa are magnets for tourists, though different reasons. These are the basis for

reasonable demand through these regions. Some of the cities and their reasons for attracting the

traffic are as follows:

Ahmedabad — beautiful textile museum of the world

Aurangabad — a few miles from the famous Ajanta and Ellora caves, a sacred site for Hindus,

Jains and Buddhists

Jaipur — the Pink City, famous for Rajput architecture

Jodhpur — the Sun City, also known as the Blue City

Mumbai — the financial capital, the hub of Bollywood and London to many an Indian Dick

Whittington

Nagpur — at the geographical center of India

Nashik — the city of temples located 180 km from Mumbai

Pune — Maharashtra's cultural capital, a historic city and home to many educational

institutions

Pushkar — home to the country's only Brahma temple, the camel festival in November is an

added bonus

Alternative modes of transport present:One of the important factors that is to be considered for viability of the regional airlines is

the availability of the alternative modes of transport. In this regard, the western region is well

connected through road and rail. The golden quadrilateral connecting the Mumbai and Delhi

connects Maharashtra, Gujarat and Rajasthan which makes it easy for journey by road. The

region is also well connected through rail network with multiple trains operating between major

stations and often operating at 100% capacity.

These modes although are threat or in competition to a regional airline, gives a rough idea of

mobility present in the region. With the advantage of time an airline provides, it can be estimated

that a small percentage of population will be willing to shift their mode if it were available.

Demand Estimates in the Western Region:The western region seems favorable for a regional airline in most of the parameters

except for the alternative modes that are present. Hence to estimate the demand in the regions,

we have selected routs that are connected by rail, and the routes are analyzed based on the

number of trains connecting between them. We assume that the percentage of population that

will use the regional airlines is proportional to the rail traffic. Also, there exists significant

amount of waitlisted people for some of the routs who are not confirmed to travel by train and

since they are the people who have the need to travel but are denied confirmation, they might be

a potential demand segment. Further the traffic for a regional route is assumed to be made of the

following components:

1. People who travel by road

2. People who travel by train

3. People who are not able to travel by train (No confirmation of tickets)

4. New traffic due to availability of the airline

5. People who travel by other domestic airlines (In routes where there is availability)

The first 4 components will be the traffic for routes connecting tier 1 and tier 2 cities whereas the

5th component is also added for routes connecting these tier 1 and tier 2 cities to hubs. The

following routes are analyzed based on the above five components to estimate the demand for

that particular route. The primary objective of the estimation is to find classify the route. To find

out the frequency of operation of flights between the cities of the route. The metrics on which the

components are evaluated are as follows:

Component Metric Based on

1 High or

Low

Connectivity through National Highway and No. of buses

available operating on an average

2 #No. No. of trains connecting the route on an average

3 Exist / Not General wait list trend for trains for that particular route

4 - Cannot be Estimated

5 #No. No. of flights connecting the two regions of the route on an

average

The following are the routes that are analyzed between tier1 and tier2 cities based on the first 4

components listed above.

S. No. Route Distanc

e (km)

Component

1 2 3 4

1 Aurangabad to Surat 478 High 2 Exist -

2 Surat to Pune 418 High 3 Exist -

3 Pune to Aurangabad 235 High 2 Exist -

4 Jodhpur to Jaipur 337 Low 0 No -

5 Udaipur to Jaipur 415 Medium 3 No -

6 Udaipur to Ahmedabad 263 Medium 7 Exist -

7 Ahmedabad to Jodhpur 453 Low 4 Exist -

Analyzing the above routs, an important trends are observed. The Aurangabad, Surat and Pune

routes have high no. of buses connecting between them, despite the no. of trains available.

Which shows that trains are not able to carter to the mobility needs of the people travelling

through these routes. Also the no. of trains on the Jodhpur, Udaipur, Jaipur lines is high due to

the fact that they are connected through single line and most of the trains connecting major

destinations passing through them. Hence there is medium to low no. of buses that are available

between these destinations. The weights of components that constitute the traffic for regional

airline vary for these two routes. Also taking into account the population of the cities involved

the routes are classified into routes requiring flights of single and double frequency.

Among the other routes that are analyzed these routes are considered due to the

uniformity of demand that can be approximated. The first 3 routes looks to have similar demand

ranges and the next 4 routes with lower ranges. Hence the fleet can be designed if the routes with

similar demand are operated as a cycle. Based on the above analyses the routes are classified

with demands as follows:

1. Pune – Surat – Aurangabad : Double Frequency Route

2. Ahmedabad – Udaipur – Jodhpur – Jaipur : Single Frequency Route

The double frequency routes are estimated to have a demand ranging from 120 to 180 and hence

two flights will be required and the estimated single frequency route will be from 60 to 90 which

can be catered through single flight.

Analyzing the components for routes that are connecting to hub like Mumbai have shown that a

lot of air lines are connecting the tier 1 and tier 2 to Mumbai and hence even though the

component 5 is high for these routes it might not result in traffic for the regional airline. Hence

the other routes are not considered for operation for the regional airline.

Fleet Selection:For the above selected routes the route 1 could be operated with one flight and route 2 with

another. Hence the fleet size would be 2 and the ideal seat requirement for the estimated demand

will be 80.

Future Projections and Plans:

The expansion would be in terms of adding new routes to the existing two loops. The fleet size

wil also increase accordingly. The other identified route loops include the following:

Rajkot – Ahmedabad – Burj

Indore – Surat – Ahmedabad

Other way to expand is to connect the tier-1 and tier-2 cities to hubs like Mumbai. In that case

the network would look something like below:

For this expansion the biggest threat will be from the domestic carriers who has operations in the

same routes. Also the domestic carriers expanding into regional routes can be threat to the

airline.

Works CitedWikipedia. (n.d.). List of Airports in India. Retrieved from Wikipedia.com:

https://en.wikipedia.org/wiki/List_of_airports_in_India

Wikipedia. (n.d.). Western India. Retrieved from Wikipedia.org: https://en.wikipedia.org/wiki/Western_India