BANGALORE; How do you shore up the topline when a good chunk of your customers is unable to afford your key product or service and much as you would like to, you just can’t bring down prices?
Well, sell more to the chunks which can afford it.

That’s precisely what the airlines seem to be doing at the moment. As the load factors on scheduled flights dip, many carriers are turning to the charter segment to prop up earnings and offset losses from scheduled operations.

New Delhi-based regional  carrier MDLR Airlines has exclusively deployed one of its three Avro-RJ-70s for charter services.

Koustak Dhar, executive director - commercial, MDLR Airlines said, “Since early this year, one of our three aircraft is being used for only charter services. We have altered our business model to cover up losses that we were making on scheduled flights.”
The regional airline, which began operations in April last year, has been logging negative yields on its commercial flights since inception.

In contrast, margins in charter services are as high as 70-80%, giving the carrier a healthy revenue mix.

“We launched structured charter services to improve our margins. Yields on scheduled flights are dependent on how many passengers you fly, while for charter, we charge by the hour. This gives us assured returns on every charter flight,” said Dhar.

Budget carrier SpiceJet has also been utilising its spare aircraft for operating charter flights as and when requests comes in.

Samyukt Sreedhatan, chief operating officer, SpiceJet Ltd said, “This year, during February-March period, we flew 10-12 charter flights. Last year, we did not have the luxury of spare aircraft to offer charter services.”