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The Collapse of Air Costa



Air Costa is (has been) an Indian regional airline headquartered in Vijayawada. Air Costa was the first regional airline of South India promoted by the formidable LEPL group founded by Sri L.P Bhaskar Rao. 8 destinations on 17 routes were served. It commanded a 0.8% share in the Indian domestic airline market till February 2016. 

CEO: Vivek Choudhary (2016– )
Headquarters: Vijayawada
Founded: 2013
Fleet size: 3; comprise of the contemporary E-190s; leased from GECAS
Number of employees: 800
Hub: Vijayawada
  • Air Costa  has not flown since February 2017 and had cancelled bookings till May because of cash crunch and financial issues with the aircraft lessors.
  • The airline has also not paid its 450 employees salaries since January 2017 resulting in an exodus of employees, including 40 pilots.
  • The employees plan to protest at the airline's headquarters in Vijayawada demanding payment of their salaries. The airline's monthly wage bill stands at around Rs 40 million.
  • The Indian civil aviation regulator, Directorate General of Civil Aviation (DGCA), has deregistered two aircraft left with the grounded airline Air Costa. Its two Embraer aircraft have been removed from the Civil Aircraft Register.
  • The latest action by DGCA will effectively allow lessors to take back the aircraft from Air Costa.
Read MoreCan Air Costa be Termed as a Failed Regional Air Connectivity Story ? 

The story of Air Costa does not make a happy reading. While the world is rejoicing over the growing Aviation prospects in India, failed stories like Kingfisher, Air Pegasus, and Air Costa act like dampeners for a potential investor/entrepreneur. The flier, too, loses out on available options. Analysts believe that respective managements failed to live up to the challenges and could not put up a professional management show. When an entity like the formidable
 LEPL group ably led by Sri L.P Bhaskar Rao fails like this, the new entrepreneur is not left with any inspiration to venture into Aviation.

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