Airline needs to first get federal sanction

Thiruvananthapuram: Kerala’s proposed airline, Air Kerala, which will also be India’s first airline promoted by an individual state, is expected to take to the skies on April 14, 2013, when Kerala celebrates Vishu, its New Year, chief minister Oommen Chandy has been quoted as saying.

However, the airline will first have to get federal sanction for which it faces two hurdles, namely, the conditions that any new airline must have five years’ operational experience in the domestic aviation sector, and have at least 20 aircraft. Kerala is seeking to get both these clauses waived as a special case.

The demand for an alternative to India’s national carrier, Air India, has been strong, particularly in Kerala owing to abrupt cancellations of flights and the near-monopoly situation of the national airline in the Gulf sector. Flight cancellations have been a bitter bone of contention for hundreds of thousands of Keralites based abroad, particularly in the Gulf countries.

Air Kerala hopes to raise Rs5 billion (Dh353 million) as equity, with the minimum share price pegged at Rs10,000, which the government hopes will enable common people to subscribe to the airline’s equity. There are also proposals for companies owned by Keralites abroad to promote share subscription among their employees.

Some in the aviation sector, however, point out that it will not be easy for a government-promoted company to run an airline, considering that even private entities have been unable to run airlines with financial viability. One of India’s leading private airlines, Kingfisher, is deep in the red, and is presently facing punitive action from lenders.

Source: http://gulfnews.com/news/world/india/air-kerala-hopeful-of-taking-to-skies-in-april-2013-1.1086669