Air Kerala

Air Kerala
Founded	February 2006
Commenced operations	April 2013 (Planned)
Hubs	Cochin International Airport (Kochi)
Secondary hubs
Focus cities	Middle East Cities
Parent company	Cochin International Airport
Headquarters	Kochi, India

Air Kerala is a proposed low-cost carrier airline initiated by the Government of Kerala, registered as a subsidiary of the Cochin International Airport Limited (CIAL).^[1] The airline is planned to commence operations in April 2013.^[2] The State government, CIAL and other public sector companies will together hold 26% of the shares of the company, while the remaining 74% will be issued to individuals and private groups.^[3] Air Kerala is India’s first airline with a state government as one of the primary stakeholders.

History [edit]

The project was first proposed in 2005 during the Chief Ministership of Oommen Chandy and Air Kerala International Services was registered as a fully owned subsidiary of Cochin International Airport in February 2006. However the proposal went to cold storage, after the ruling UDF government stepped down in 2006. On returning to power in 2011, the UDF government decided to revive the project. The hardship faced by the Non-resident Keralites, due to high airfares and frequent cancellation of flights between Kerala and the Gulf countries, led to the revival of the Air Kerala proposal. The project has evoked good interest from the various Malayali businessmen and Non-resident Keralites in the Middle East.^[4]

Business Plan [edit]

The primary objective of the airline is to cater the Middle East sector, where around 2.5 million Keralites are employed. The airline will follow the model of Cochin International Airport Limited (CIAL), which is India's first PPP airport. The architect of CIAL's success and it's present MD, V J Kurian IAS, is expected to head the proposed Air Kerala.

Air Kerala plans to raise 200 crore through equity as initial capital. While 26% shares will be held by the state government, CIAL and public sector undertakings, the remaining 74% will be held by shareholders. The state government and CIAL will fund 50 crore each while 100 crore will be mobilized from the public as shares. Each share is valued at 10,000 and it is expected that at least 2,00,000 Keralites will invest in the project. Consultancy firm Ernst & Young, that conducted a study in 2006, is now preparing the Detailed Project Report for the government.^[5]

Hurdles [edit]

The proposal of starting the airline was first floated in 2006. But the Central government rejected the proposal, as it did not meet the criteria for operating international services.

The Government of Kerala has sought speedy approval from the MoCA for launching Air Kerala. The government has also sought exemptions on the MoCA regulatory norms, that require airline companies at least five years experience in domestic flight operations and a minimum fleet size of 20 aircraft, to start International flight services.

The state government cites the exemption given by the Central government to Air India when it launched it's subsidiary, Air India Express.^[5]

Current Status [edit]

Air Kerala is expected to submit formal application in November 2012 before the Directorate General of Civil Aviation (India) (DGCA) for getting the no objection certificate for services, as stated by the Minister for Fisheries, Port and Excise, Shri. K. Babu, who is also a member of the director board of Air Kerala.^[6]