15.10.12

Air Kerala snippets


Foreign carriers have evinced interest in Air Kerala, a state-promoted airline project, expected to fly between the Arabian Gulf countries and the southern Indian state. A tie-up with a foreign airline may help the start-up to fly overseas overcoming regulations which insist five years of domestic operations and a minimum fleet size.
Currently, Air Kerala, with an initial equity base of Rs 200 crore, will be 26% state-owned with non-resident Keralites and business groups holding the remaining shares valued at Rs 10,000 per share. Ernst & Young is helping the Kerala government with a feasibility report on the airline project, which could dent Air India’s business on the profitable Gulf sector routes.
Last month, India allowed foreign airlines to buy 49% ownership in domestic carriers opening up possibilities for Air Kerala, which is being floated to offer competitive fares to the state’s diaspora of more than 2.5 million in the oil-rich Gulf. Incidentally, the Arab airlines have dominated prevailing talks of foreign interest in India’s crisis-hit aviation sector.
High airfares between Kerala and the Gulf was snowballing into a “social problem” with many workers unable to visit homes even once in two years. Middle East industrialists of Kerala origin — like Ravi Pillai, M A Yousuf Ali and others —were backing the airline venture. The business conglomerates of Pillai and Ali alone employ about 65,000 people from Kerala who would be eager subscribers to the shares of the airline company.
Kerala CM Oommen Chandy has advanced the case of a federal government’s right to start an airline with privileges similar to the national carrier Air India, setting off a debate on aviation sector regulations. He pointed out that regulatory hurdles were waived when Air India Express, a subsidiary of the national airline, started international operations citing the interests of the government-owned company. Chandy said Air India’s “callous attitude” towards Kerala-origin labourers in the Arabian Gulf was the key motivation behind plans to launch a new airline.

No comments: