Despite slowdown, Paramount Airlines upbeat about expansion

March 30th, 2009 - 1:57 pm ICT by IANS  

By Venkatachari Jagannathan
Chennai, March 30 (IANS) The global aviation industry may be facing one of its worst crises, but city-based carrier Paramount Airlines is busy drawing up strategies to expand its operations across the country.

The company will set up a new hub in Kolkata by May-June to expedite its penetration into the northern and eastern markets, increase fleet size and launch international services by 2012, Paramount managing director M. Thiagarajan told IANS.

According to him, West Bengal Chief Minister Buddhadeb Bhattacharjee is “keen” on improving the air connectivity with southern India.

“Many southern cities don’t have direct connection with states located in northeastern parts of India,” Thiagarajan said, explaining West Bengal’s interest.

Paramount will have direct flights from Chennai to Kolkata and from there connecting flights to cities like Guwahati, Imphal and Dibrugarh, all in Assam.

“We will continue to expand our flights to western India, and will be flying to northern India by early next year. In 2012, we will go international,” he added.

According to industry estimates, the new hub at Kolkata could cost the company around Rs.30 crore towards handling equipment, ticket reservation systems and other expenses.

Thiagarajan declined to reveal the investment details of the company but said it will buy nine aircraft this year, taking its fleet strength to 15. This will go up to 20 by 2010-end.

“By then, all our flights will have not only in-flight entertainment but also cloud computing (internet connectivity) facility on board,” Thiagarajan said.

Asked about the choice of aircraft, he said: “It depends on the route an aircraft flies. A single model fleet has advantages like low maintenance cost. Presently all our six aircraft are from Embraer (of Brazil).”

Despite 2008-09 being a “year of crisis”, Thiagarajan claimed that Paramount was the “leader of the the southern skies”.

“When others contracted, we have logged a three percent growth rate,” he said, adding that the company was looking forward to increasing its shares.

“People who earlier flew in business class in bigger airlines are migrating to us to travel in the same class. We enjoy 80 percent load factor in our 2,500 services per month,” Thiagarajan said.

He further expressed optimism that the airline’s recently launched cargo services would contribute a major share of its revenues.

“The cargo revenue will be around 14 percent of our total revenue. We can handle around 100 tonnes per day and 3,000 tonnes per month,” Thiagarajan said, adding: “The focus is on moving perishable and time-sensitive cargo.”

The official, however, said the rupee depreciation against the dollar was driving up cost of operations. “Hedging is possible only to a limited extent and a fare hike may be there in April.”

Thiagarajan said the low-cost airline model was unlikely to work in India as airport charges are high in the country.

“In India the airport charges are high as cities do not have multiple airports,” he said.

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