Regional airline Air Pegasus, which suspended its operations last month, is making attempts for a revival by holding talks with a PE fund and a major South-East Asian airline.

Sources close to the airline told BusinessLine that Air Pegasus is in advanced discussion with PE Fund and is willing to dilute up to 30 per cent stake to raise money. It is expected to raise about ₹40 crore by diluting its stake. Sources said the Singapore-based investment firm Temasek could be one of the entities approached to rescue the airline.

A South-East Asian airline too, has approached Air Pegasus, sources said.

In another development, the airline sources said that the regulator DGCA had recently convened a meeting between the airline management and the lessors to arrive at a solution for restarting Air Pegasus. Sources said the deadline set for recommencement of the operations was September 1.

During the discussion, the airline management agreed to pay 50 per cent of the three-month arrears to the lessors and the rest in instalments once the operations are resumed. The regulator is learnt to have informed the lessors that all the airlines in the country had the support of the civil aviation ministry.

The lessors, in turn, assured the regulator that they will study the new commitments made by the airline management and return for mediation soon. They had approached the regulator in July with a request to de-register three ATR-72s leased out to Air Pegasus as it had failed to pay the lease rentals. The monthly leasing cost is about ₹85 lakh.

Air Pegasus is owned by Shyson Thomas whose Decor Aviation is one of the leading ground-handling agents for several airlines. The airline commenced its operations in April last year. Before the operations were suspended, the airline flew to seven cities in south India.

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