Air Kerala may not be viable, say experts

Though hailed as an ambitious project, ‘Air Kerala’ seems to be a far cry from reality. The experts say that the viability of the project is still in doubt.

The increasing fuel price, crisis in the aviation sector in the country and the absence of business class passengers in the state are the major factors which can effect the financial viability of the project.

Paulose K Mathew, chairman, Travel Agents’ Federation of India - Kerala, said that keeping in view that the 70 per cent of the pa ssengers to the Gulf Cooperation Council (GCC) countries from India are from Kerala, the concept ‘Air Kerala’ becomes a prerequisite for the state. But whether the project is viable or not is something which has to be discussed in detail.

Almost 60 per cent of the operational expense in the airline sector is of fuel. Since the fuel prices keep on increasing, a newly-formed company will require huge chunk of money to operate. It is doubtful that the state and the Cochin International Airport Limited (CIAL) can meet this challenge,” he said.

Most of the passengers from Kerala are of economy class. Hence, the airline will not be lucrative in the near future, Paulose added. The proposal to start a budget airline was first floated at the Pravasi Bharatiya Divas conclave in New Delhi five years ago. But it was not granted permission by the Central government as the proposal did not meet the criterion of the existing provisions which permit an Indian carrier to operate international services. It requires a minimum fleet size of 20 aircrafts and experience of five years of continuous operations in the domestic sector.

The state government expects some relaxation in this rule also. The long forgotten idea has gained momentum with M A Yusuff Ali, chairman, EMKE Group, resigning from the Director Board of Air India on July 21.

 Experts feel that for an airport the public-private-partnership model is very much suitable but it will not be successful for an airline company as the capital requirement is very huge.

They pointed out that the American and European airline companies are not ready to operate from Kochi, stating the unavailability of business class passengers.