Air Costa in funding talks ahead of launch of pan-India ops

New Delhi: Regional carrier Air Costa, which is awaiting aviation regulator's nod to fly pan-India, is in talks with various investors for raising funds.

Air Costa also plans to lease six more Embraer aircraft by the next calendar year as the airline looks at enhanced operations once it receives national operator's permit, a senior airline official said.

"We have been looking to raise funds and have been approached by several investors with their proposals. We are in talks with them at different levels. It would take a while before we decide about our investment partner," the official said.

Refusing to name "interested parties," who were in talks with the airline, the official said both domestic and overseas investors have evinced interest in funding Air Costa.

"We are open to both strategic investors and private equity players as far as funding is concerned," he said without divulging quantum of funds Air Costa was looking at.

The Vijaywada-based airline had commenced operations in October 2013.

He said the airliner expects to acquire pan-India operations permit from the aviation regulator Directorate General of Civil Aviation next month.

"We are hopeful of getting the permit (for national operations) in November and have already started working on the route expansion plan, which include Delhi and some other major airports," the official said.

Currently Air Costa offers 32 flights per day to nine destinations including Hyderabad, Chennai, Bengaluru, Coimbatore and Ahmedabad.

Air Costa would phase out the two 67-seater Embrarer E170 planes and replace them with 110-seater E190s by January next year to cater to the growing demand.

"We are aiming to have a single type fleet as part of our long-term business plan. We are inducting two E190s, one in November and another one in January, in place of the two E170s. This would help us meet increasing demand across our network besides reducing the overhead cost," he said.

The airline had early last year placed a firm order for 50 jets with Embraer, the world's largest maker of regional aircraft, in a deal valued at USD 2.94 billion under a 20-year fleet-management plan.

Air Costa has options for an additional 50 purchase rights for E190-E2 jets as well.

The delivery of these planes is expected to commence from January 2018.

Air Costa is part of diversified LEPL Group, which has interests in real estate, power and infrastructure development.

Air Costa has logged a 20 percent growth in topline in the first two quarters of the current fiscal over the year-ago period on account of higher passenger traffic, he said.

According to the DGCA data, the airline had flown a total of 3.82 lakh passengers in the first half of the current fiscal, accounting for nearly one percent of the domestic market pie.