Air Kerala

History

The project was first proposed in 2005 during the Chief Ministership of Oommen Chandy and Air Kerala International Services was registered as a fully owned subsidiary of Cochin International Airport in February 2006. However the proposal went to cold storage, after the ruling UDF government stepped down in 2006. On returning to power in 2011, the UDF government decided to revive the project. The hardship faced by the Non-resident Keralites, due to high airfares and frequent cancellation of flights between Kerala and the Gulf countries, led to the revival of the Air Kerala proposal. The project has evoked good interest from the various Malayali businessmen and Non-resident Keralites in the Middle East.

Timeline

Air Kerala was expected to submit formal application in November 2012 before the Directorate General of Civil Aviation (India) (DGCA) for getting the no objection certificate for services, as stated by the Minister for Fisheries, Port and Excise, Shri. K. Babu, who is also a member of the director board of Air Kerala.

2014

In February 2014, former Kerala Chief Minister Oommen Chandy indicated that the central government's requirements for initiating international airline operations had stalled the project's progress. He affirmed his administration's commitment to pursuing the initiative if these prerequisites were relaxed. Subsequently, in December 2014, the Board of Directors opted to commence domestic operations instead. Negotiations commenced to lease a 15-seater aircraft for service between the state's three airports. However, the plan shifted towards acquiring an aircraft with a five-hour non-stop flight capability. This aimed to expedite the accumulation of the minimum domestic flying credits mandated.

March 2015

In March 2015, the airline's board of directors opted to postpone the launch of commercial operations pending clarification regarding the proposed amendments to the '5/20' rule. As of 2017, the rule has been revised to the 0/20 format. As per the new guidelines, any airline with 20 aircraft or that keeps aside 20 percent of their fleet exclusively for domestic sectors can fly abroad. The five-year domestic flying experience has been revoked.

The primary objective of the airline was to eventually operate international flights to the Middle East, where around 2.5 million Keralites are employed. The airline would follow the model of Cochin International Airport Limited (CIAL), which is India's first PPP airport.

Air Kerala planned to raise ₹ 200 crore through equity as initial capital. While 26% of shares were to be held by the state government, CIAL and public sector undertakings, the remaining 74% would be held by shareholders. The state government and CIAL would fund ₹ 50 crore each while ₹ 100 crore would be mobilized from the public as shares. Each share was valued at ₹ 10,000 and it was expected that at least 200,000 Keralites would invest in the project. Consultancy firm Ernst & Young, that conducted a study in 2006, is now preparing the Detailed Project Report for the government.