In a related development, the ministry of civil aviation has granted a no-objection certificate (NOC) to East West for operating scheduled airline services and the import of five Boeing aircraft as its initial fleet.The pre-operative expenses for the revival of the airline-pegged at Rs 30 crore-will be pumped in by East West Trade Links chairman Nasirudeen Wahid.East West Airlines' senior vice-president (commercial & planning) C Ramachandran told The Financial Express: "Wahid is raising the entire pre-operative expenses of about Rs 30 crore. If the creditors agree on the admitted liability, the airline will start with five imported aircraftin the first year and increase it to about 27 aircraft in the third year of operations."

According to him, negotiations have already started with lessors to take on lease five aircraft. Among the aircraft being considered are the Boeing 737-400, 737-500 and Airbus A320. The airline has already had a settlement with its employees. The admitted liability of the employees will be paid in 12 quarterly installments, Ramachandran said. The staff strength of the airline will be reduced from 3,000 to 1,500 employees.

The airline plans to operate on a few virgin routes in addition to the old routes. It plans to link Delhi directly with Kerala and Tamil Nadu. Besides, it is also looking into the viability of an Ahmedabad-Madurai route.

Ramachandran added: "We have drawn up as seven-year plan of action based on a feasibility report prepared by Price Waterhouse".

According to the company official, East West revised its "admitted liability" to the banks in January.

Indian Bank tops the list of creditors withan amount of Rs 80 crore, followed by State Bank of Travancore (Rs 13.5 crore), State Bank of India (Rs 9 crore), Allahabad Bank, State Bank of Hyderabad, Dena Bank and United Western Bank (Rs 8 crore each) and Bombay Mercantile Bank (Rs 4.5 crore).The company wants banks to peg the interest rate on their outstandings at their respective prime lending rates (PLR) and waive interest with effect from March 1995.

It plans to kick off the schedule of repayment of bank loans after the completion of two years from the "effective date" of restarting operations. The dues will be paid in 20 equal quarterly installments.