As per the plan, ModiLuft will be back in business by March next with a new identity - Royal Airways. ModiLuft has appointed Mumbai-based Millennium Capital Management and Khandwala Securities as advisors and agents to raise $35 million required to relaunch the airline.

The money is being raised from overseas market through a recently launched holding company-- Royal Holding Services. The company has already kicked off a $17.5-million private placement programme. The balance amount will be raised through a convertible preferential issue.

Speedwing, which had earlier prepared the relaunch plan for ModiLuft, will provide experts to manage all key positions of the company to make it operational.

Assigned by Speedwing, key personnel include chief executive officer Rex Lezard, chief financial officer Rober Hughes, marketing director John Roussel, technical service director David Ely. While Lezard and Robert Hughes have already taken charge, others will join shortly. As part of its executive supply agreement, Speedwing will help the airline in assiging other positions also.

Hughes told The Financial Express that the company, which will have a 1:1 debt-equity ratio, plans to break even in about two years of operations.

Talking about the present debt of around Rs 100 crore payable by ModiLuft, he said the company has prepared a repayment schedule which is acceptable to the parties concerned. The company is holding talks with others for a mutually agreed settlement plan, he said.

On the government clearances, Lezard said that ModiLuft has a licence to operate schedule airline which has to be renewed once its ties up the finances for its relaunch. The airline also has a no-objection certificate from the ministry of civil aviation to import five aircraft.

As required under the civil aviation policy after arranging the needed finance and aircraft, the company will get its licence operational, he said. The company, he said will initially operate three Boeing 737-400 aircraft on dry lease. Subsequently, another three similar aircraft will be inducted in the fleet, he said, adding that by the end of two years the airline will have a fleet of 12 aircraft.

In the beginning, the airlinne will operate from Delhi and Mumbai, he said, adding that the routes it plans to serve include include Cochin, Bangalore, Calcutta, Coimbatore. As per the civil aviation policy, the airline will also have to fly less-profitable routes. The company plans to include Jammu and Srinagar in its initial schedule.

Optimistic about the profitability of the company, Lezard said there is a huge potential in the domestic aviation sector. Unlike the US and European markets, which have come to a near saturation level, Indian domestic aviation market is growing, he said.

On the on-going price war, Lezard said that competition is healthy and good for consumers, adding ModiLuft too will have to offer competitive fares.