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Visa Air, new Indian domestic airline about to take off

A new airline, Visa Air, is preparing to begin providing domestic service within India as soon as next month, a senior government official said.

Visa Air has obtained a licence to import Bombardier Dash 8 turboprop aircraft, packed-off pilots for training and is preparing to take to the skies within a month, the official said.

Visa Air would become only the third privately owned, scheduled domestic airline in India, which offers vast potential for development of air travel because of its immense population, fast-growing middle class, vast size and difficulty of travelling between cities and tourist sites by any form of land transportation.

An industry source said Bombay-based Visa Air will operate a hub-and-spoke partnership with parent North Star Airlines, a New Delhi-based start-up airline.

North Star, which will begin operation in October, plans to fly on trunk routes like Delhi-Bombay, while Visa Air flies feeder routes, the industry source said.

Rajiv Jha, the chairman and managing director of North Star Aviation, the parent company of both North Star Airlines, told Reuters that he was willing to discuss plans for North Star but responded by saying "no comment" when asked about Visa Air.

INVESTMENT

North Star, said Jha, is backed by a group of 20 US-based non-resident Indians. The group initially plans to invest $100 million to acquire six 150-seater aircraft, he added.

"We are negotiating with Boeing and Airbus for these aircraft, and expect to arrive at a decision soon on which aircraft to go in for," said Jha, a former pilot for state-run Indian Airlines.

North Star Aviation is in the process of setting up infrastructure and hiring crew for North Star Airlines, he added.

COMPETITION

Visa Air and North Star Airlines will face competition from three airlines already providing scheduled flight services within India, and from a host of charter operators.

Privately owned Jet Airways, with a fleet of 26 Boeing 737s, last year surpassed government-owned Indian Airlines to become the largest provider of domestic air service.

The third airline, Air Sahara, operates largely in north India with a fleet of eight aircraft.

India threw open its domestic skies to private players in 1993, when nearly a dozen airlines took to the skies.

Wrong planning and financial woes soon grounded many of the entrepreneurs, with just two surviving in the scheduled airline (those with published flight timetables) category.

The Indian government barred investment by foreign airlines in the domestic sector, thwarting the attempt of the Tata group and Singapore Airlines to set-up a domestic airline in the mid-1990s.

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