Three regional airlines, all based out of South India, are struggling to raise funds, and at least one of them is expected to be sold as early as this week.
The Coimbatore-based Air Carnival is set to be sold for about ?70 crore to an investor, sources close to the airline said.
The airline has one ATR-72 and commenced its operations in July last year. At its peak, it used to operate 10 daily flights to three cities, including Chennai.
A second airline, Air Pegasus, based out of Bengaluru, which shut its operations in July last year, sold a 74 per cent stake to FlyEasy, another Bengaluru-based airline, but has received only about ?5 crore out of the ?18 crore it is expected to get.
Sources in the airline told BusinessLine that funds are being released in instalments, and that Air Pegasus will commence its operations next month.
Air Pegasus had struck a deal with a Gulf-based company, which operates FlyEasy airline, in January, but FlyEasy is yet to commence its operations.
Sources said the airline has started the process of leasing two 72-seater ATRs from the US-based Amur Aviation; one of them is likely to be inducted into the fleet this month. FlyEasy’s promoters are also planning to route the investment to Air Pegasus from another company. FlyEasy hasn’t received the NoC from various agencies, and hence, routing the investments through the airline may not be easy, sources said.
The third cash-strapped airline, Air Costa, stopped its operations in February this year, and is in talks with several investors to raise about ?200 crore.
A spokesperson for the airline said the Air Operator’s Permit is still valid, but setting a timeline for restarting operations was difficult.
“We expect some positive response from some of the investors we are talking to this month,” said Kavi Chaurasia, Vice-President, Marketing. He said the airline’s entire fleet of Embraer aircraft had been taken back by the lessors.
Air Costa did not bid for the regional connectivity scheme as it requires smaller aircraft than Embraers, he added.
Chaurasia denied that the choice of Embraer aircraft for the fleet was one of the reasons for the airline’s temporary shutdown. He pointed out that operational costs had gone up, while revenues were stagnant. “If we had been able to induct six aircraft by December 2016, the airline would have turned profitable by now,” he said.
“Embraer was, perhaps, the best choice at that time as we wanted to expand rapidly to several cities,” he added.
Sources said the airline would consider inducting aircraft other than Embraer if any investor chooses to do so. Dalvin Cook Womens JerseyShare This