India’s newest airline looks to fill void from second and third-tier cities

Fly91, a new Indian airline named after the country’s telephone code, is aiming to take advantage of India’s rising middle class by focusing its services on second and third-tier cities. The carrier is hoping to start operations around the last quarter of this year. Heralded by Manoj Chacko, the former executive vice-president of the now-defunct Kingfisher Airlines and the man who set up the India business for risk management group Fairfax group, Fly91 will be the first airline to be based in India’s southwestern coastal city of Goa. India-based investment firm Convergent Finance will anchor Fly91’s initial $25m investment. Harsha Raghavan, managing partner at Convergent Finance, will be Fly91’s Chairman while Chacko will be the CEO. Calling the announcement of a new airline a welcome move, Vishal Bhadola, an aviation consultant based in India, said, “The fact that the airline is being conceptualized by a mix of promoters from airline and finance industries, will help stakeholders understand and deal better with the capitalization challenge.” Bhadola added that India’s fast-growing cities of 350m strong middle class population and the government’s focus on improving airport infrastructure in Indian hinterlands and schemes such as the Regional Connectivity Scheme would certainly boost investor confidence. However, he warned that the regional airline model in India has been dotted with failures because of under capitalization, unoptimized business model, unsuitable aircraft selection and other pitfalls.<br/>