God’s Own Country gives wings to govt-owned airline

The new venture will also run into civil aviation regulations, which say only a carrier that has flown in the domestic skies for at least five years would be allowed to fly foreign routes.

But a no-frills, shoestring-fare airline for Malayali NRIs is an idea hanging fire since long. Though these are still early days, if Oommen Chandy’s lacklustre government pulls the idea through, it could bring a smile in almost two out of every ten Kerala homes, in an election year.

There are 1.6 million Malayalis abroad, almost 90 per cent of them in the Gulf. A Centre for Development Studies survey says 17.6 per cent of homes in Kerala now have at least one NRI, sustaining the state’s money-order economy. Last year, they had together remitted Rs 18,465 crore.

The flip side though is that their per capita remittance was only Rs 473 a month, indicating that a majority can’t afford prevailing airfares.

Air India’s recently launched low-budget Express service to the Gulf with an eye on these NRIs has failed to live up to its raison d’etre, jacking up fares drastically.

So not surprisingly all eyes are on the proposed airline. Cochin International Airport Ltd (CIAL), the company running India’s first private-owned and operated international airport at Kochi, will be the chief promoter. The government holds the single largest stake in CIAL, but about 10,000 NRIs and a few politicians and industrialists own much of the Rs 230 crore worth of CIAL capital.

‘‘It would be the CIAL that invests the controlling 26 per cent stake in the carrier’s Rs 300 crore initial outlay. The government has no cash to spare,’’ says V.J. Kurien, an IAS officer who founded and heads CIAL. The remaining 74 per cent will be mopped up from NRIs, local investors and others.

With CIAL performing well, logging a Rs 48 crore profit last year and poised for major diversifications — including an international maintenance hub and five-star hotels — finding investors wouldn’t be a problem.

But the hitch would be the regulations, as CIAL has no plans to have the proposed carrier fly in the domestic skies. “We will seek a waiver,’’ says Kurian. Official sources say with the Congress-led government preparing for polls eleven months away, the Centre may blink. For now, CIAL has shorlisted five agencies to do the carrier’s feasibility study.

CIAL sources say they expect opposition from Air India and Indian Airlines, as they have a near-monopoly of the Gulf traffic.