New airlines wait for takeoff

New Delhi: The government’s keenness to prevent sickness in the aviation industry may slam the brake on half-a-dozen new airlines which have sought green signal to take off. The civil aviation ministry has asked these companies to come up with fresh business proposals and detailed financial plans to operate as scheduled carriers. The minimum capitalisation norms for airlines have been revised recently and Rajiv Gandhi Bhavan wants new entrants to come up with sound business plans.
Once the new norms are in place, an airline company will need paid-up equity of Rs 50 crore compared to Rs 30 crore, at present, to qualify as a scheduled carrier. This norm will apply to airlines operating with aircraft takeoff mass exceeding 40,000 kg. In case of a carrier having takeoff mass less than 40,000 kg, like turboprops, ATRs and Dorniers, paid-up capital need will increase from Rs 10 crore, at present, to Rs 20 crore.
New entrants shall be given permission only after the ministry is convinced that the companies have sound financials, sources in the ministry said.
The decision is likely to affect upcoming airlines including Easy Air, Mega Airways, Megapode Airline and Star.
25/01/07 Sunny Verma/Economic Times

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