The Hindu Business Line : Kerala cabinet nod for budget airline

THE State Cabinet has accepted in principle a proposal to launch an international budget airline. The State Government will hold a stake in the proposed airline, which will operate flights from Kerala to the Gulf countries.

Announcing this at a press conference following a meeting of the State Cabinet on Wednesday, the Chief Minister, Mr Oommen Chandy, said the Government has decided to go in for a detailed feasibility study on the project. Cochin International Airport Ltd (CIAL) has been entrusted with the responsibility of conducting the feasibility study, he said. CIAL will appoint a professional consultant to prepare the feasibility report.

The idea is to launch the budget airline as a public-private partnership modelled on the lines of CIAL, the Chief Minister said. The State Government will hold a 26 per cent stake in the venture, while the public, particularly non-resident Keralites, will hold the remaining shares. The proposed airline, which is expected to require an investment of approximately Rs 300 crore, will use leased aircraft.

However, the Centre will have to give certain exemptions to this airline, Mr Chandy said. For instance, current regulations stipulate that an Indian airline must have operated domestic services for at least five years before it can be allowed to fly abroad. If the Kerala Government-supported airline is to operate, the Central Government will have to exempt it from this rule, he said.

CIAL's success has given the State Government the confidence to embark on the project to launch a budget airline, Mr Chandy said. CIAL is now among the five most profitable airports in the world, he added.

Responding to a query on whether German automobile manufacturer BMW has taken a decision on its proposed facility in Kerala, the Chief Minister said that conditions are currently not in the State's favour. The company has expressed reservations about investing in the State due to two major drawbacks.

According to the company, Kerala does not have any ancillary unit for the automobile industry and the second drawback is that the State does not have a workforce with auto industry experience. The State Government has made some suggestions on how these drawbacks can be overcome and the company's final response is awaited, he added.

The State Government is committed to going ahead with the `Smart City' project to establish a technology park in Kochi, as it will benefit the State, the Chief Minister said. However, every effort will be made to ensure that Kerala's interests are not adversely affected by the project, he emphasised. The State Government is to hold discussions on the project with the leaders of all Opposition parties in the State, he added.

Commenting on his recent meeting with officials of the National Dairy Development Board (NDDB), Mr Chandy said the board had accepted in principle a Rs 88-crore proposal from the State Government to develop Kerala's dairy sector. On the construction of an expressway and the issue of mineral sand mining, the State Government is looking at forming consensus, he said.

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