Tuesday, November 17, 2015

Air One waits for long-term investor to get wings

Air One plans to induct six to eight planes a year and in five years to have a fleet of 40 planes

Air One Aviation Pvt. Ltd., an integrated aviation player, which is into air charter business, aircraft maintenance service, aviation consultancy, ground handling, aviation academy and promoted by former Air Sahara President Alok Sharma is waiting for long term investors to start a schedule national airline in India, the company’s top executive said.

Long-term financial investors and even foreign airlines are understood to be staying away from investing in new airline ventures due to uncertainty in India’s Civil Aviation Policy. “No one has come to us with an investment proposal though we received NOC 16 months back. An opportunity exists for a full service carrier but because there is no clarity on Indian’s Aviation Policy more specifically on the 5/20 rule (5 years of domestic flying experience and a fleet of 20 aircraft to fly abroad), investors are not willing to commit funding,” Alok Sharma, Promoter and Director, Air One Aviation told The Hindu.

The company which operates under the brand name Air One received No Objection Certificate (NOC) from the Ministry of Civil Aviation in July 2014 along with other players to start a p an India domestic airline, but it is yet to approach the Directorate General of Civil Aviation (DGCA) for a flying permit. Unless renewed, the NOC will lapse in August 2016.

Two new airlines Turbo Megha, which operates under the brand name TrueJet and Air Pegasus, which started operations earlier this year, reported market share of 0.3 percent and 0.2 percent respectively for September 2015. “Recent developments in the domestic market have made it challenging for any new player to survive without a long term and profitable business plan. Jet Airways and SpiceJet are turning around. IndiGo and Go Air are making profit while two new entrants (AirAsia India and Vistara) are vying for space. Under these circumstances, selection of the right aircraft and long term funding will make the difference,” he said.

“The challenge is the plane. There are not very many planes available to start a viable business. Unless I have access to big money, there is no point starting. We are exploring whether we would go for Embraer or ATR fleet. We are waiting for a set of investors to pull everything,” he added.

Air One plans to induct six to eight planes a year and in five years to have a fleet of 40 planes. “There is space for another full service airline. But you need to select the right aircraft. The fuel efficient A320 Neos are not available for the next five years. There is opportunity in the international market, so new players are lobbying for the removal of the 5/20 rule,” Mr.Sharma added He said his company would require Rs.500 crore in five years to start and run the airline. “We have a networth of Rs.100 crore. We can start operation with an investment of Rs.150 crore. There is an opportunity in smaller planes. We are working hard,” Mr Sharma who was earlier with Modiluft, InterGlobe and Sahara Group said.

Source:  http://www.thehindu.com

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