New Civil Aviation Policy prefers big players only

Planning to start your own airline, well think again. The proposed Civil Aviation Policy hopes to bring in safeguards to avoid a low cost airline bust. The government intends to make fleet expansion contingent on equity infusion. CNBC-TV18 reports that carriers like Air Deccan and Indigo could take a hit.
Taking a lesson from the low cost airline bust in the early 1990's, the government now wants only serious players with deep pockets to fly into the sector. According to the draft policy new entrants will have to cough up additional capital to start an airline. If your fleet consists of aircrafts like Boeing 737's or A-320's the minimum capital needed will be Rs 50 crore instead of the present Rs 30 crore. For airlines flying smaller planes like Turboprops, the minimum capital requirement has been doubled.For every five big aircrafts an airline acquires, it will have to infuse additional capital of Rs 20 crore. Operators of smaller aircrafts will be required to up their capital by Rs 10 crore on induction of additional five aircrafts.
14/04/06 Moneycontrol.com

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