Trade Analytics

Go Back

JSW group to foray into aviation business

Economic Times:  February 28, 2017

New Delhi: Sajjan Jindal’s JSW Group is entering the civil aviation business. It has bid for the Bengaluru-Vijayanagar route under the government’s regional connectivity scheme, its top executive said.

“Our Group has submitted the bid under the government’s scheme and the bid is only for one route, which is Vijayanagar to Bengaluru. No listed company is involved,” joint managing director and Group’s chief financial officer Seshagiri Rao told ET.

The foray into civil aviation would mean that the proposed SPV will need to get approvals from the aviation ministry and the Directorate General of Civil Aviation as a scheduled commuter airline before it launches operations.

He added that the group is not looking at this venture as an entirely commercial venture. “It is not a purely commercial venture for us and we are looking at it more from a perspective of providing connectivity to our plant. It may become a big business in the future but as of now our investment is only in the range of about Rs 20 crore,” Rao said. Rao, however, did not reveal any details on the type of aircraft that will be used to launch operations saying he is not aware of those details. He further said that about 25 to 30 people from their company travel to Vijayanagar daily.

“This route will also help tourists travelling to Hampi,” he said. Tourists traveling to Hampi now have only the road and rail routes, which take about six hours from Bangaluru. Hampi is a popular tourist destination, dotted with temples and a UNESCO World heritage site, with monuments dating as far back as 1442 from the Vijayanagara empire.

An Airports Authority of India official, when contacted, confirmed that JSW Group has applied, but refused to reveal any further details, as the bidding process is still on.

Another aviation ministry official, when contacted, said: “The proposals are from 11airlines, including Air India and SpiceJet, and they expect to kickstart operations at about 15 unserved or underserved airports soon.”

The Modi government, in June last year, announced a plan to provide regional air connectivity at a fare of Rs 2,500 per hour of flight. According to the scheme, the government would bridge the gap between cost of operations through the regional subsidy fund that has been created by charging domestic airlines a charge per flight.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.