• Caution for govt’s regional connectivity scheme; fund cruch halts Air Pegasus’ ops for 2nd day

    In October 2012, Kingfisher Airlines stopped operations because its engineers refused to certify aircraft fit for flying. This was a culmination of a long list of woes that the airline was facing. What happened over the next few months is well documented. Eventually, the airline’s flying permit expired and it never flew again.
    In December 2014, SpiceJet had to cease operations for a day because of unpaid dues to oil companies but then, with gradual help from the government, it got back on its feet under a new promoter who presented a comprehensive turnaround plan. The return was in a smaller avatar but operations have continued uninterrupted since. Cut to 2016, and another airline has been unable to conduct its operations for two days running. Only this time, it is a regional carrier called Air Pegasus which was operating just three aircraft, connecting Bengaluru to smaller cities across South India.
    The suspension of operations of Air Pegasus is a cautionary tale, specially since the Centre has been emphasising enhanced regional connectivity through a draft scheme which caps fares on regional routes in return for some viability gap funding to airlines. The scheme is not yet finalised but essentially encourages airlines with smaller aircraft to launch flights to India’s hinterland while getting some help from the Central and state governments in the form of VGF. The severe fund crunch which crippled the operations of Air Pegasus in the last two days should serve as warning against pitfalls of this ambitious scheme.
    A source confirmed that operations of Air Pegasus remain suspended today as well, as the promoters continue to hold negotiations for getting back aircraft and infusing some urgently needed funds into the airline. This person confirmed that the “cash burn” at the airline is Rs 5 crore a month and that there is an immediate need of up to Rs 100 crore to fund operations. What could not be ascertained is whether the three ATR aircraft which Air Pegasus was operating till day before yesterday have been possessed by lessors or not. Steve McNair Womens Jersey

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