Monday, December 5, 2011

Kerala eyes low-cost airline to Gulf

Kerala will pursue with the federal government its proposal to start an airline, mainly to extend low-cost option to its vast diaspora in the Gulf and also push Islamic banking to fund infrastructure, Chief Minister Oommen Chandy said.

“We are at the moment concentrating on our fourth international airport at Kannur. Once that is done, we will pursue the airline option. We have not given up on the idea of a low-cost carrier,” Chandy said.

“We have also brought down the minimum level of investment in the Kannur airport project to Rs50,000 from Rs200,100 for individual investors,” he said .

The project, under public-private partnership, is being set up by a consortium in which 26 per cent of the equity is with the government, 23 per cent with public sector units, two per cent with other institutions and the remaining 49 per cent with private players.

The airport is expected to handle an annual traffic of more than one million international passengers and 300,000 domestic passengers as per 2009-2010 estimates and will also serve as an air cargo hub for perishables like flowers, vegetables, fruit and seafood.

Home to idyllic beaches, Kannur in the northern part of Kerala is among 10 best cities in India to live in, as per research firm Indicus Analytics, and 13 per cent of its population is employed overseas. The project is coming up on a 2,000-acre area and expected to start operation in 2013.

Kerala currently has international airports at Thiruvananthapuram, Kochi and Kozhikode. Chandy said the previous United Progressive Alliance government had posed three conditions for overseas operations, a fleet of five planes, five years of domestic operations and no operations to the Gulf.

“We said Air-India Express with just two planes was allowed. Within three months, it got permission to fly to the Gulf. They said it is an Air-India subsidiary. We said, okay we accept, but you also have to accept this, this is a state government airline,” Chandy said.

Chandy also said his government will soon apply its mind on the issue of promoting the concept of Islamic banking in the state, which believes in sharing profits and bans levy of interest to fund infrastructure.

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