Air India has decided to appoint a consultant to suggest ways to revive the defunct air service provider Vayudoot to connect smaller cities and tourist spots in the country. In a board meeting of the company held in the Capital last week some of the members proposed to launch the airline with equity participation to relaunch the carrier.
?The whole idea is to partner with states either by way of equity participation or viability gap funding (VGF). Each state would be approached separately for this,? a member said.
Vayudoot was started as a subsidiary of erstwhile India Airlines in 1981 to connect cities in the north-eastern part of the country where road and rail transport infrastructure was in poor shape. The operation of the carrier, however, was stopped in 1997 due to worsening financial health.
Air India had earlier approached the corporate affairs ministry to wind up Vayudoot after its operation ceased to operate.
?The Air India chairman (Arvind Jadhav) is on board in the decision to relaunch Vayudoot. We are thinking of reviving the airline in a phased manner starting with one aircraft and then go on increasing the fleet based on its performance,? the official said.
The proposal to revive Vayudoot would be put forward for consideration to the Air India board. The civil aviation ministry is playing active role in bringing back Vayudoot.
?The Air India management may approach the tourism departments of various states. Bigger states such as Uttar Pradesh, Madhya Pradesh and Maharashtra could provide equity to the tune of Rs 20 crore each. It will be a win-win situation for both the states and Air India,? an official in aviation ministry said. ?The Air India management could firm up the proposal to revive Vayudoot in a time-bound manner,? the official added.
With air traffic growth in the country on upswing, the attempt to expand capacity in the domestic market is expected to create a new revenue stream for cash-starved Air India.
As per the data released last week by the Directorate General of Civil Aviation (DGCA), the domestic air traffic of scheduled domestic carriers surged 25.1% to 48.75 lakh during November 2010 compared to 38.98 lakh passengers in the corresponding month last year. The domestic air traffic grew 19% to 468.09 lakhs during January-November of 2010.