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Regional airline Star Air beats bigger peers IndiGo, SpiceJet on passenger load

While the small airline may not be strictly comparable to its much larger peers, the development reiterates the shift towards regional connectivity in Indian aviation

March 19, 2021 / 09:56 AM IST
As people shuttle between cities to their hometowns for long weekends, festivals and smaller businesses move across the country, Tier II and Tier III cities have come into focus. Darbhanga airport. File Photo.

As people shuttle between cities to their hometowns for long weekends, festivals and smaller businesses move across the country, Tier II and Tier III cities have come into focus. Darbhanga airport. File Photo.

 
 
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In a rare instance, one that industry observers say may have happened for the first time, a regional airline has clocked the highest load factor in February.

Star Air, a regional airline promoted by the Sanjay Ghodawat Group, recorded a passenger load factor of 79 percent, up from 71.2 percent in January. In second place was bigger peer SpiceJet at 78.9 percent, third was the Wadia family-owned GoAir with 76.5 percent. Country's largest airline IndiGo had a load factor of 74.4 percent.

Based in Bengaluru, Star Air had trailed SpiceJet in January. Since the domestic flights resumed in May 2020, the airline had been close on the heels of its bigger airlines when it came to filling its seats.

Interestingly, Star Air had nearly the same load factor a year ago too. In February 2020, it stood at 79.1 percent. But it ranked ninth on the list of 12 airlines whose data is tracked by industry regulator DGCA. SpiceJet was the highest at 93 percent.

Yes, it will be tough to compare Star Air directly with its larger peers. IndiGo has a fleet of 284 aircraft. Star Air has five. The country's largest airline at present operates 1,000 flights a day. Star Air does 125 a week. And because of its much wider operations, IndiGo's load factor averages lower than most of its peers, most of the months. Also, Star Air's Embraer aircraft seat 50 passengers, whereas the A320s that IndiGo employs have 180 seats.

Close

But the smaller airline's industry beating load factor, even as all the carriers in the industry continue in their road path to recovery amid the pandemic, is not a one-off case. It is one of the many indicators that now underline the shift in Indian aviation since the COVID-19 created a havoc - that of passenger traffic moving towards smaller cities and towns, against the metros, which till now dominated the industry.

Businessmen flying more

Star Air CEO Simran Singh Tiwana agrees that the focus on smaller cities has helped the airline. In fact, the carrier has already surpassed its pre-COVID-19 numbers. It ended 2020 with a total passenger traffic of 9 lakh passengers, up from  a little over 6 lakh fliers in 2019.

Tiwana points out to one interesting fact that sheds some light on the surge in traffic in smaller cities. "It could be because businesses in smaller cities, which suffered the most due to lockdowns, are trying very hard to come back. On an average, half of our passengers are local businessmen. On some days, this rises to 60 percent," said Tiwana.

While this will bring cheer to the Indian economy and policymakers too, the high percentage of businessmen traveling on these routes again is a trend that runs opposite to what seen on metro routes. Most of the busiest routes, including Delhi-Mumbai and Bengaluru-Mumbai, got much of their clientele from corporate travelers. But this is the very segment that has been impacted the most, post COVID-19, with many of the larger companies limiting travel to save costs.

The busiest routes

Tiwana highlighted four routes that are the busiest for the airline, and on which load factors have been upwards of 80 percent.

These are, Belgavi-Mumbai, Ahmedabad-Belgavi, Belgavi-Indore and Benguluru-Kalaburagi. In the first three routes, the airline competes with SpiceJet and IndiGo. On Bengluru-Kalaburagi, Star Air has to contend with Alliance Air, the regional airline arm of Air India.

Interestingly, Alliance Air has been ramping up operations too. It will be connecting Kalaburagi to Mumbai from March 25. Three days later, it will begin service on Hyderabad-Pune-Belgavi route.

It will be interesting to see how long regional airlines, including Star Air, can hold on to their niche advantage, as IndiGo and SpiceJet can deploy more capacity on these routes. They have already done on many of the regional routes, including those covered by UDAN, the scheme that incentivises airlines to fly to smaller towns.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Mar 18, 2021 02:38 pm

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