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Vandana Saxena
Mumbai, Nov 6: Modiluft, the domestic carrier which stopped operations two year ago, is yet to fulfil the eligibility criteria for restarting operations. The old licence can not be renewed until the company meets preconditions like possession of aircraft, a senior official at the director general of civil aviation's (DGCA) office said.
Besides, the company has to get other approvals like the type of aircraft, the routes it plans to operate and frequencies. It also has to submit a detailed financial plan, including the capital requirement and source of funding, sources in the director general of civil aviation added.
Modiluft maintains that it will soon restart operations under a new identity, Royal Airlines. As per the company's plans it will acquire 12 aircraft and serve around 14 cities. Sources from the civil aviation ministry say the company has not submitted a proposal to the effect. The company also believes that it has a permit to operate as a scheduled airline since it has been applying forrenewal of the licence periodically.
However, ministry sources say a licence is renewed periodically only if the airline is operating. But to start services after any break in operations the company has to submit a detailed revival strategy for approval.
Since ModiLuft has not been operating for some time now, the routine renewal of the license is not possible, they said. Only after all the clearances are in place is a licence is granted.
For the ministry, granting of new licences will depend on factors like the capacity available and traffic projections, routes to be served and sustainability of the venture.
To relaunch operations ModiLuft also needs to infuse fresh capital in the venture. Last year the company had obtained an approval from the Foreign Investment Promotion Board (FIPB) to generate funds overseas. However, this will soon expire if the company does not exercise the options.
According to company sources, ModiLuft is considering a preferential allotment to generatefunds.
Incidently, due to several amendments made in the civil aviation policy in the past two years, the company's plan to have a management tie-up with British Airways has also fizzled out. Earlier, it had contracted Speedwing, a wholly-owned subsidiary of British Airways to prepare a revival strategy.
Ever since it discontinued operations after the breakup with German-based airline Lufthansa it has been preparing for a relaunch. Meanwhile, industry analysts are sceptical about the success of the venture. They feel that under the present circumstances, survival of any new domestic airline is difficult. Traffic is growing at a very slow pace and there is severe competition. Besides, it is a highly specialised and capital-intensive industry, they add.
In the past several private domestic airlines like East-West, Damania and NEPC were forced to close down. Among the select few players that have managed to survived were Jet Airways and Sahara.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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