Paramount to use litigation cash to take to skies again

Written by Debabrata Das | New Delhi | Updated: Jan 24 2013, 07:09am hrs
Chennai-based Paramount Airways, which last flew in 2010, has firmed up plans to fly again from April 2013. The airline, which was flying a fleet of Embraer E170 jets before being grounded in early 2010, will return to the south Indian skies with a fleet of six turbo propeller ATR planes, sources in the airline told FE.

All the licenses are in order and we will restart operations from April 2013, said a person in the know of the development. With R1,650 crore we won in litigation against our former lessors, we are now in the unique position of sitting on a lot of cash rather than debt, like other airlines in India.

We will use this cash to restart operations, the person said. The decision on routes is yet to be taken but we will look to revive the routes we were flying on before being grounded.

Initially, the airline will resume operations on south Indian routes. But sources say that airline bosses are planning an expansion on other national and international routes once operations stabilise.

Paramount will resume flying on its original scheduled operators permit, a national permit, which was renewed six months ago. Earlier in December 2012, a British court ruled in favour of Paramount in a case against its lessors GE Capital Aviation Services and Celestial Aviation Trading. The compensation amounted to R1,650 crore.

Before being grounded, Paramount captured a 27% market share of air passenger travel in South India although its national market share stayed between 2-3%.