The Hindu Business Line : Air One investors seek to exit; launch put off to Nov 15

AIR One, the country's yet-to-be-launched first private sector feeder airline, is hunting for a fresh set of investors as the original investors want to exit the company.

The airline has now put off the launch of its service to November 15, as it expects the new investors to be in place by that time.

The Air One Feeder Airline Managing Director, Dr J.W. Lobo, told Business Line that the airline was negotiating with a few investors to raise around Rs 30 crore that will be required for the airline to take off. "

As per the understanding reached with the original investors earlier, they are exercising their option to exit the airline," Dr Lobo said.

Part of the funds will be used to buy out the original investors.

The airline had earlier planned to start the service on August 15.

Air One was set up by former Indian Airlines officials and the original investors are a group of nine businessmen from Mangalore.

They invested around Rs 12 crore while the promoters, including Dr Lobo, had invested around Rs 3 crore.

The investors hold 74 per cent stake in the airline, while the rest is held by the promoters.

The airline is still working out on the fresh valuation for the stake held by the original investors.

The airline plans to initially deploy an Embraer aircraft, the 50-seater ERJ-145 with the engine sourced from Rolls Royce which will set up a base in Bangalore.

As per the earlier plan, Air One was set to buy a total of 25 Embraers. The first two of the Embraers were taken on lease. The Coimbatore-based Paramount Airways too has acquired the new generation 170/190 family series Embraer aircraft for its operations.

Air One will connect second tier cities to the metros directly. For example, there will be direct flights between cities such as Bhubaneswar and Pune to Bangalore.

The airline will have three types of fares and they are expected to be 30 per cent lower than the fares of other airlines.

The aircraft will have two plus one seating arrangement and fly mostly in the mornings and evenings.

Initially, the airline will stick to chartered flights and later launch a full-fledged service.

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