Can Kerala which operationalised the country’s first greenfield airport on the PPP model pull off another coup of sorts — with India’s first crowd-funded, State-run international airline?
The fate of Air Kerala, the airline start-up hoped to provide Non-Resident Keralites (NoRKs) better and more affordable connectivity to the Middle East, may be at a crossroads after the new civil aviation policy reiterated that any airline operating to international sectors must have a minimum of 20 aircraft, which translates to a hugely expensive inventory.
No State in the country has attempted to float an airline yet. But V.J. Kurien, Additional Chief Secretary (Aviation) and Managing Director, Cochin International Airport Ltd (CIAL), says Air Kerala can still take off if a “mass-based company” with five lakh shareholders is set up.
The option of launching it as a domestic carrier has been effectively foreclosed. The five-member board of Air Kerala that met last year had deferred the decision to commence domestic flight operations till a “clear picture” emerged on the move to amend the ‘5/20’ rule.
A commissioned study before the board headed by the Chief Minister states that domestic flight operations alone cannot sustain the airline. That may also impact the readiness of NoRKs and Middle East businessmen of Kerala origin to invest.
Mr. Kurien told The Hindu that a prospect on the drawing board is pooling Rs.20,000 each from as many as five lakh prospective share holders, which would garner Rs.1,000 crore.
The shareholders will be given fare discount coupons to use on the airline for the next five years. This may also ensure viable flight loads for the fledgling airline.
“If needed, we can even double the number of shareholders to 10 lakh. NRI businessmen from Kerala have pledged all support, as the airline will offer affordable travel to the Middle East,” he said.
18/06/16 S. Anil Radhakrishnan/The Hindu
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The fate of Air Kerala, the airline start-up hoped to provide Non-Resident Keralites (NoRKs) better and more affordable connectivity to the Middle East, may be at a crossroads after the new civil aviation policy reiterated that any airline operating to international sectors must have a minimum of 20 aircraft, which translates to a hugely expensive inventory.
No State in the country has attempted to float an airline yet. But V.J. Kurien, Additional Chief Secretary (Aviation) and Managing Director, Cochin International Airport Ltd (CIAL), says Air Kerala can still take off if a “mass-based company” with five lakh shareholders is set up.
The option of launching it as a domestic carrier has been effectively foreclosed. The five-member board of Air Kerala that met last year had deferred the decision to commence domestic flight operations till a “clear picture” emerged on the move to amend the ‘5/20’ rule.
A commissioned study before the board headed by the Chief Minister states that domestic flight operations alone cannot sustain the airline. That may also impact the readiness of NoRKs and Middle East businessmen of Kerala origin to invest.
Mr. Kurien told The Hindu that a prospect on the drawing board is pooling Rs.20,000 each from as many as five lakh prospective share holders, which would garner Rs.1,000 crore.
The shareholders will be given fare discount coupons to use on the airline for the next five years. This may also ensure viable flight loads for the fledgling airline.
“If needed, we can even double the number of shareholders to 10 lakh. NRI businessmen from Kerala have pledged all support, as the airline will offer affordable travel to the Middle East,” he said.
18/06/16 S. Anil Radhakrishnan/The Hindu
