Sun group plans to enter aviation business

Chennai: Sun Network, the Chennai-based entertainment group, owned by Kalanidhi Maran, is said to be gearing up to enter the aviation sector.
According to sources, the Rs 1,106-crore Sun group is in the process of firming up a joint venture with Star Aviation, an airline promoted by the diversified Dubai-based ETA Star group.
Less than 10 days ago, the two entities were understood to have held discussions for converting Star Aviation, floated by the Dubai group, into a 50:50 joint venture that could be named as ‘Sun Star’, sources privy to the deal told ET.
It is also learnt from an i-banking source that Sun Network has appointed Enam as the agency to advise on the transaction. Top sources in the ETA group also confirmed that Star Aviation has been evaluating various options to stabilise its operations. However, sources close to Sun Network promoters firmly denied any such JV move with Star.
The tie-up talk between Star and Sun comes on the back of Star Aviation’s rollout plans hitting a roadblock. Star Aviation intended to launch its commercial services as the country’s first-of-its-kind medium cost regional airline for South India early in 2009. Star holds a regional licence to commercially operate only in the four southern states. While conceptually such airlines are not permitted to fly in busy routes, especially between metropolitan cities, Star has been permitted to operate between Chennai, Hyderabad and Bangalore.
Meanwhile, a couple of sources familiar with the development said Sun group could also consider joining the existing private airliner, Go Air, as a partner if the deal with Star does not materialise. On Wednesday, a senior official in Sun Network confirmed the group is foraying into the aviation business through the inorganic route as it is not the group's core business. However, he declined to go into further details.
13/08/09 Hemamalini Venkatraman & Niranjana Ramesh/Economic Times

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Categories: New Aug 2009, Regional Airlines Aug 2009, Star Aviation Aug 2009