The Hindu Business Line : Air Deccan not affected by Budget provision

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Chennai, March 7 Air Deccan on Wednesday said that it was not affected by the change made by the recent Budget to the effect that all small aircraft — not only ATRs — up to a maximum weight of 40,000 kg would be eligible for a concessional central sales tax duty of 4 per cent, (instead of 30 per cent otherwise).

Thirty of Air Deccan's fleet of 53 aircraft are ATRs. The only other airline that has a non-ATR with a maximum weight of 40,000 kg is Paramount Airways, which has five Embraer jets.

Answering a question at a press conference here on Wednesday as to whether the change the Budget had brought about would not lower Air Deccan's competitive advantage, Mr Warwick Brady, Chief Operating Officer, Air Deccan, said that the airline would still remain competitive.

He said that ATRs were cheaper and easier to maintain and the cost per passenger km worked out cheaper than a jet.

Mr Samyukth Sridharan, Principal Sales and Marketing Officer, Air Deccan, noted that only ATRs could land at several small airports, which had short runways. Even small jet planes would not be able to land there, he observed.

He pointed out that Air Deccan had many "monopoly routes" such as Chennai-Tuticorin, Chennai-Rajahmundry and Chennai-Vijayawada, and only ATRs could land at these airports.

In fact, Air Deccan's fleet expansion programme includes acquisition of eight more ATRs, he said. (The airline intends to acquire four Airbus aircraft, in addition to the one that it recently got.)

When pointed out that there were destinations where jets could land and where currently Air Deccan was flying ATRs (such as Chennai-Madurai), Mr Brady said that the airline would gradually replace the ATRs on those segments with Airbus.

Because an Airbus' carrying capacity was more (180 seats on A-320), the cost per seat would come down drastically, Mr Sridharan said. He, however, agreed that the availability of load was a key factor in this calculation.

Simulators soon

Mr Brady told Business Line that Air Deccan would soon get the two Airbus simulators at its Bangalore training centre. These would be full flight simulator — capable of simulating an aircraft in motion — and would cost about $15 million (Rs 67 crore) apiece, he said. Air Deccan has just installed a fixed base ATR simulator, costing about $3 million (Rs 15 crore). These simulators are needed to train the airline's growing number of pilots.