On September 1, Karnataka’s Industries and Infrastructure Development (IID) Minister MB Patil announced that the Karnataka government was exploring the idea of starting its own airline to enhance connectivity within the State. This move is significant because this is the first time a State is contemplating launching an airline.
Air Kerala, erroneously quoted by some sections of media as a “state owned” enterprise, was actually being planned by Cochin International Airport Limited (CIAL), which is a public private partnership with NRIs holding 74 per cent share.
First mooted in 2005, Air Kerala never took off and currently a Dubai-based businessman is trying to revive the idea as a private venture. It may be mentioned here that, while Air Kerala’s objective was connectivity between Kerala and the Middle East, Karnataka’s focus is on regional aviation.
Karnataka’s civil aviation policy is yet to be promulgated but the intent of successive State governments is to promote regional connectivity.
In 2012 it tried to start flights from Bidar (an Indian Air Force training base) but ran into headwinds as the Operation, Management and Development Agreement (OMDA) between GMR Hyderabad International Airport (GHIAL) and Airports Authority of India (AAI) stipulated that no other airport could operate within 150 km of Hyderabad airport; Bidar fell within that distance.
Finally, a tripartite agreement was signed between the Karnataka government, GMR and the IAF under which the State government undertook that it would use Bidar only for regional flights and not those that GHIAL wished to fly. Shivamogga airport, which was inaugurated in February this year, saw its first commercial flight on August 31.
The Chief Minister has said that Vijayapura airfield will be operationalised before the end of this year and the State government will develop airstrips in Raichur, Bellary, Karwar, Hassan, Dharmasthala, Kodugu and Chikkamagaluru and a heliport in Hampi in the near future. The emphasis appears to be on the State running these airports as contrasted to AAI managing them.
Thus, it makes sense for the State to have an airline too so it can reap the benefits of airport and airline related revenues. The IID Minister has mentioned a three aircraft fleet as a start. However, the airline business is a capital intensive one and the State’s budget for 2023-24 does not support the airline ambition.
14/09/2023 AK Sachdev/Business Line
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