Thursday, April 19, 2012

Even in turbulent times, Captain R Gopinath to launch new airline

Five years after selling off his low-cost carrier Air Deccan, Capt G R Gopinath is set to make a comeback.

He has secured a no-objection certificate from the civil aviation ministry to start an airline.

Gopinath, the pioneer of the Indian low-cost airline revolution, said he could not comment.

But Jayanth Pooviah, director and chief executive officer of Deccan Charters, confirmed the development.

"We applied and received the NOC two months ago. It'll be something like Air Deccan," said Pooviah, hinting that the proposed airline would follow a low-cost, no-frills model. He refused to elaborate further, saying only Gopinath could share the plan.

Gopinath founded Air Deccan in 2003 and introduced the no-frills concept in India [ Images ]. Within three years, Air Deccan became the number two airline by passengers flown. Vijay Mallya's [ Images ] UB Group bought a 26 per cent stake in it in 2007 for Rs 550 crore and eventually completed a takeover after buying shares through an open offer.

However, his next venture in the aviation space, Deccan 360, a cargo airline in which Reliance Industries Ltd [ Get Quote ] was an equity partner, was grounded last year.

A plan to start a regional air transport service in Gujarat also failed to take off. Following the twin setbacks last year, Gopinath is working on restructuring the Rs 500-crore debt he owes to banks for the cargo venture.

Gopinath continues to run Deccan Charters, a company he founded in 1997.

The firm has a fleet of 12 choppers and three turboprop planes.

In addition, it operates and maintains five private jets. It has a non-scheduled operator permit.

Securing a NOC from the government is one of the steps required for starting a scheduled passenger service.

An applicant has to submit project feasibility report, business plan, details of company ownership and types of aircraft to be used, among others.

An operator can start scheduled passenger transport service with a plane, but is required to induct five planes within a year of securing the permit.

Sources close to Gopinath said he was 'serious' about starting the airline.

"He has a non-compete clause with Kingfisher, which ends next February.

"If he convinces Kingfisher chairman Vijay Mallya, he may be able to start the airline early.

"He already has a debt of about Rs 500 crore (Rs 5 billion).

"He will not be able to raise fresh funds from banks until these dues are cleared.

"He will have to look for private funding," said a person close to Gopinath.

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