Kerala’s ambitious Air Kerala proposal has got a boost with civil aviation ministry mooting relaxations in criteria of five years’ experience and a 20-aircraft fleet for Indian carriers to fly overseas.
Reacting to reports on civil aviation minister Ajit Singh’s plans to approach the Cabinet seeking the norms waiver, chief minister Oommen Chandy told Deccan Chronicle on Saturday that the government was awaiting an updated detailed project report by Ernst & Young on Air Kerala.
“I welcome Mr Ajit Singh’s stance and I’m the happiest because he agrees with our reasoning on waiving the Central guidelines”, said Mr Chandy.
Mr Ajit Singh’s priority included connectivity to Tier II and other non-metro cities but Mr Chandy said he would try and convince him of the need to accord top priority for the Kerala-backed airline in the Gulf sector.
Reportedly, Prime Minister Manmohan Singh, recently at the Emerging Kerala meet, had quipped that Kerala’s demand for the waiver was “genuine”.
Air Kerala to steer clear of FDI
Even as the centre sanctioned Foreign Direct Investment in Indian airline companies, Air Kerala, the airliner proposed by the Kerala Government in association with NRIs and other public investors, has decided not to seek the FDI option.
CIAL managing director, who also heads the CIAL-floated Air Kerala, V.J. Kurian, told DC that Air Kerala was confident of raising the equity capital from the NRIs and other investors and didn’t see any need to seek FDI.
Industry insiders point out that the model Air Kerala is seeking is to make the prospective travelers the shareholders of the company and issue coupons to them offering discount for travel in the airline.
“When discount coupons are offered, they will choose to fly Air Kerala only.
Being shareholders of the airliner, they will have a sense of belonging and when the company makes profit, the shareholders will benefit.
By traveling the airliner, they will have the dual advantage of making profit as a traveler and as shareholder,” said an expert.