Kingfisher Makes Regional Carriers Wince

Start-up regional carriers have been hit rather hard by the kingfisher crisis. Companies with licenses to start services are finding it difficult to rent planes as lessors are being cautious after their bad experiences with Kingfisher and Paramount Airways.

Most agencies that lease planes to airlines are based in the UK and US. These agencies do not have confidence in the aviation sector in India, and are refusing to lease planes to start-up aviation companies. Some have demanded an advance payment of rent for two years instead of the conventional three months. This has not only increased costs but also delayed the plans of regional carriers to start services.

To improve air connectivity between tier II cities, the Directorate General of Civil Aviation has given approval to Air Costa, Air Pegasus, Volk Air, Deccan Shuttle, Karina Airlines and Religare Voyages as regional airlines. The carriers are trying to get Beechcraft, ATR or Bombardier aircraft on lease. New airlines will have to shell out about 18 crore as advance to lease an ATR aircraft. This is more than 25% of the plane’s total cost.

A senior AAI official said, “Lessors will have to factor in the dues of airlines when they form an agreement to lease their planes in future. We have started to assess the individual dues of each Kingfisher aircraft so that planes which do not have dues can be released for confiscation.”

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