Air Kerala Project Revisited

Published on: 02 Jan, 2013
Published under: Ernakulam District News, Kerala Business News, Kerala Travel News

1 Jan 2013

Chief Minister Oomman Chandy on Monday disclosed that the state government was revisiting its plans to launch an airline of its own, though it was yet to abandon the project altogether.He said under the present laws an airline can launch international flights only if it had operated domestic flights for five years. “But if the prevailing conditions in the travel industry are indicative we might end up facing a loss of Rs 300 crore to Rs 500 crore by five years. We cannot afford such a massive loss,” said the chief minister.

Cochin International Airports Limited (CIAL), the parent company of Air Kerala, said as per the reports domestic flights alone might not be viable for a new airline, even at very high occupancy rate as fuel costs account for the lion’s share of flight operating cost. There are also fears that NoRKs will not be keen to invest in an airline project if it has to operate domestic flights alone for five years.”We are confident that Air Kerala can break even quickly with low cost flights in the international sector. But this may not happen if it has to operate in the domestic sector alone for five years,” said Chandy.


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