The pilot-turned-airline owner and his partner Biraja Jena plan to launch FlyBig, which has secured 16 routes under the fourth phase of UDAN, the government’s regional connectivity programme.
Having lost the bid for Jet Airways, Sanjay Mandavia says he now has more time to focus on his regional airline venture, FlyBig.
Mandavia, the pilot-turned-airline owner, and his partner Biraja Jena, chairman of UAE-based fund Imperial Capital, say they will launch the airline, which has secured 16 routes under the fourth phase of UDAN, the government’s regional connectivity programme.
They were bested by the consortium of UAE-based entrepreneur Murari Lal Jalan and London-based fund Kalrock Capital.
The FlyBig-Imperial consortium had promised Rs 770 crore to the lenders and an additional Rs 292 crore as the cost of the resolution process. It had also offered 20 per cent equity to the lenders.
On the other hand, the Kalrock-Jalan consortium offered the financial creditors Rs 380 crore and another Rs 391 crore in the form of non-convertible debentures (NCDs).
In 2012, Mandavia, along with his partner Dilawer Singh Basraon, took the plunge to set up FSTC, the country’s first privately-held simulator training centre. They acquired two simulators -- one for the B737 NG and another for the A320. They took a 1-acre plot on the Delhi-Gurugram national highway and 50,000 square foot was built up to house the simulators.
FSTC has pilot-training centres in Gurugram and Hyderabad, and are all set to unveil the new airline -- FlyBig. They are in the final stages of getting approval from the Directorate General of Civil Aviation.
Though the resolution plan of Kalrock Capital-Murari Lal Jalan was approved by 90 per cent of the lenders, Mandavia and Jena say their plan of integrating FlyBig and Jet Airways and focusing on domestic routes before expanding internationally was a sound one.
An executive of a bank which has exposure to Jet Airways said operationally both the plans were almost identical but the lenders thought Jalan had a higher capability to pay.
“Though we offered a sound plan and believe that it held promise for everybody – the lenders, the company, and the employees – I wish the new owners the best. FlyBig’s focus will be on unserved or less served routes. We will start with four ATR_72 and the first one is already here. The other three will be in India soon. We plan to have 20 aircraft in the next four years,” Mandavia said.
Most of the routes that FlyBig won under UDAN are in the Northeast, including Guwahati-Tezu, Tezu-Imphal, Guwahati-Rupsi, Rupsi-Kolkata, Aizwal-Tezpur, Agartala-Dibrugarh, Shillong-Passighat, and Passighat-Guwahati.
“Our plan was to have FlyBig as a feeder airline for regional routes while Jet Airways would have done the metro routes,” Mandavia said.
Jena said they were analysing the Jet Airways situation. On being asked if he would challenge the lenders’ choice, Jena said he had not thought about it.
“We are running ahead towards starting flight operations of FlyBig. Domestic flights hold a lot of promise and it is still time before international operations work normally. Hence our resolution plan on Jet Airways was primarily focused on flying domestic,” he said.
Jena’s support will be crucial to Mandavia’s aviation entrepreneurship dreams.
“As of now Mandavia is dependent on UDAN subsidies. He needs a cash-rich partner,” an executive of a consultancy firm which has worked with the consortium said.