Franco-Italian aircraft manufacturer ATR believes India needs more than government subsidies to develop a sustainable regional aviation sector. According to reports from Mint, ATR CEO Nathalie Tarnaud Laude emphasized that "India needs profitable regional airlines for sure" rather than just more carriers. The company, which is a joint venture between Airbus and Leonardo specializing in turboprop aircraft, argues that financial viability is essential for long-term success in regional aviation.
Indian regional airline Fly91 has placed a significant order for 40 ATR 72-600 aircraft from Franco-Italian turboprop maker ATR, marking a substantial expansion for the airline. As reported by AFP, the deal is worth approximately $1 billion and will help Fly91 boost capacity on routes traditionally unserved by bigger carriers. The order will take Fly91's current fleet of six aircraft to more than 60, representing a major scaling of operations in India's regional aviation market.
While acknowledging the Udan scheme's role in increasing connectivity, Laude indicated that it may not be sufficient for achieving the scale required for regional aviation success. As reported by Mint, she stated that "maybe we will need other incentives while maintaining, of course, the scheme." The proposed additional support could include more airports, manufacturing support, tax incentives, and lower airport taxes. The Udan 2.0 scheme, launched this year, has an outlay of ₹28,000 crore, almost six times the previous scheme's disbursals of ₹4,600 crore.
According to ATR's analysis reported by Mint, 4.6 billion trips take place annually between tier-2 and tier-3 cities in India, but only 3% are made by air. The company estimates that increasing aviation's share by less than one percentage point could add significant passenger volume and aircraft requirements. ATR believes the opportunity is particularly strong for routes requiring 8-12 hours by road or rail, which can be served effectively by their 70-seat turboprop aircraft.
Despite the opportunities, ATR acknowledges the challenges facing regional aviation in India. According to Mint, the company notes that nearly half of the Udan routes (327 out of 663) are non-operational due to various factors including poor visibility, runway restrictions, and financial failures of airline companies. Industry consultant Mark D. Martin from Martin Consultancy noted that while sustainability for regional connectivity has been proven in India, smaller airlines like Q400 have not been successful as jet replacements, with success depending on having a substantial ATR fleet for ultra-short regional routes.
