The Hindu Business Line : Sky Palace to wet lease aircraft for operations

SKY Palace, the former Mysore maharaja's promoted airline, has decided to take the wet lease route for running its operations, and is expected to shed 40 per cent stake to one of the two short-listed investors.

The Sky Palace promoter, Mr Srikantadatta Narasimharaja Wodeyar, told Business Line that the company expects to raise around $40 million (Rs 180 crore) for the airline. He said all its 28 aircraft would be taken on wet lease. "There is a paucity of crew and we felt this is the best option we have as of now," said Mr Wodeyar.

Each of the wet leased aircraft is expected to cost about $4.5 million (Rs 20.5 crore) every year. A wet leased aircraft comes along with the crew including the pilot.

Mr Wodeyar said the company has short-listed two investors for picking up a 40-per cent stake. The total cost of the project is expected to be around $40 million. Mr Wodeyar will hold a 54-per cent stake and Mr Ravinarayanan, former Director with Indian Airlines and Air India, will hold around 6 per cent.

The airline will have a single `club class' seating configuration and the tickets will be competitively priced. The airline will mainly fly to several tier-II cities, though it will have a skeleton service to the metros such as Mumbai and Delhi.

"There is enough market for more players, especially those which give good quality service to the customers," Mr Wodeyar said.

Mr Wodeyar said the airline would have a fleet consisting of either Boeing or Airbus aircraft. The airline, which is expected to be launched early next year, will initially have two aircraft, and within 18 months a full fleet strength of 28 aircraft.

With higher utilisation of the aircraft, around 3,900 flying hours per year and an RPKM (record revenue per kilometre) of $0.125, the airline expects to achieve a quicker turnaround, leading to better revenues. The passenger load factor is expected to be around 80 per cent.

Mr Wodeyar said the airline will fly more to tier-II cities such as Ranchi, Jaipur and Coimbatore, with the main hub being Mysore. The airline will fly smaller planes but will not have turbo-props, as it does not suit the airline's business model, Mr Wodeyar said.

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