MDLR comes to GoAir’s rescue, sells seats on less lucrative routes

Mumbai/New Delhi: Wadia Group’s GoAirlines (India) Pvt. Ltd, which runs low-fare carrier GoAir, has bought seats from Gurgaon-based MDLR Airlines Pvt. Ltd, which recently started operations in the north, to meet a rule mandating airlines to connect remote areas.
MDLR Airlines came to GoAir’s rescue after the latter’s attempt to purchase seats had been spurned by most domestic carriers.
Aviation rules require domestic airlines to fly a certain percentage of flights to smaller cities and towns that are poorly connected. Not complying with the requirement could potentially lead to an airline’s operating licence being scrapped. However, airlines have the option of buying seats from other operators to provide the prescribed service.
GoAir, which is rationalizing routes because of high jet fuel costs, has met this requirement by buying seats from MDLR that flies to smaller towns, thus being able to deploy a majority of its flights on more lucrative routes such as the one between Delhi and Mumbai.
“Yes, they have bought it from some airline (to comply with regulations),” said Kanu Gohain, director general of Civil Aviation. Mint could not ascertain the price of the seats and numbers, though a senior GoAir executive confirmed the transaction.
Another person familiar with the development said GoAir had cancelled some flights to main cities to reduce the seat-buying obligation.
MDLR Airlines, promoted by the Gopal Goyal-controlled MDLR group that has business interests in realty development, is the only carrier currently flying under a regional licence issued by the civil aviation ministry to promote air connectivity to small cities.
14/08/08 P.R. Sanjai and Tarun Shukla/Livemint

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Categories: GoAir Aug 2008, MDLR Aug 2008