Briefing media after the first meeting of the Air Kerala Ltd’s reconstituted board of directors at the Emerging Kerala Global Connect venue here, Chief Minister Oommen Chandy said the government was going ahead with the project with the support of Prime Minister Dr Manmohan Singh.
The company’s paid-up capital was fixed at Rs2bn initially, of which 74% would be offered to the public while the state government, Cochin International Airport Limited (CIAL) and the public sector entities will hold 26%. The airline will operate on leased aircraft.
Chandy, who is also chairman of the company, chaired the meeting attended by V J Kurien, who is doubling up as managing director of the new entity, along with the CIAL, and state ministers P K Kunhalikutty, K M Mani, K Babu and K C Joseph, who are the other directors.
CIAL director and prominent non-resident entrepreneur Yusuffali M A, who had made a commitment to invest Rs35bn in the state, also attended the meeting which reviewed the operational part of the company.
Several prominent NRIs attending the meet, including Dr Azad Moopen and Ravi Pillai, also promised support to the project. They hailed CIAL, promoted by 10,000 NRIs from 30 countries, as a perfect example for making such projects a huge success.
As per the preliminary report prepared by Kurien, every investor will get discount coupons for an equal amount which can be encashed while flying on AK, thus ensuring a captive customer base for the company.
Chandy earlier blamed flag carrier Air India for opposing the proposal.
On Wednesday, Chandy and his cabinet colleagues met the prime minister, who was here to open the state’s branding exercise, and got a firm assurance on the project. Singh asked his principal advisor T K A Nair to look into the matter and expedite the project. The company needs at least five years of domestic flying experience and a fleet size of 20 aircraft before beginning international flights.
The state wants waiver of both these conditions for its airline, the first of its kind in India.
“The Air India Express started operations disregarding these conditions. They started operations with just two aircraft and with no domestic flying experience within six months of incorporation,” Chandy pointed out.
The memorandum submitted to the premier stressed that Air India’s present financial problems had left expatriates stranded and airfares had got prohibitively high during the peak season.
“Keralites who work in the Gulf contribute immensely to the economy but are badly hit by the high fares. The fares in some cases are higher than what is charged for flying to the US and back,” it said.
NRK delegates attending the Emerging Kerala meet hailed the chief minister’s statement saying it would solve the 35-year-long travel woes of the low-income expatriate community in the Gulf.
“Since there are a few airline companies already grounded, there are a lot of aircraft available on lease. So it’s going to be a huge success, especially since Kurien is at the helm of affairs,” said K V Shamsudheen, director of Barjeel-Geojit Securities.
Air Kerala (AK), the south Indian state’s low-cost airline venture, expects 1mn expatriates, mainly from the Gulf region, as shareholders - making it the largest corporate entity in the country in terms of public participation.
