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Startups’ struggle to lease planes may hit regional flight plans
NEW DELHI: The government’s ambitious regional connectivity scheme might face a stiff challenge as startups and small business owners will find it difficult to lease
NEW DELHI: The government’s ambitious regional connectivity scheme might face a stiff challenge as startups and small business owners will find it difficult to lease aircraft, a senior government official said.
“It will be very easy for a SpiceJet or an IndiGo to lease planes, but that may not be the case for small businesses and startups,” said Guruprasad Mohapatra, chairman, Airports Authority of India. Barring SpiceJet and Air India, nobody was buying small aircraft, he added.
Under the scheme, the government plans to subsidise regional flights by capping fares at Rs 2,500 for a one-hour flight. The Centre is hoping that support to airlines in the form of a viability gap funding would encourage regional carriers to participate in the scheme.
In India, foreign firms that lease planes turned cautious after a massive default in payments by Kingfisher Airlines.
Recently, in the case of Air Pegasus, lessors found it difficult to get their planes de-registered, resulting in a hike in lease rentals and security deposits.
The aviation ministry is even considering drafting new rules to make it easier for lessors to repossess aircraft if an airline defaults on payments.
“Kingfisher’s grounding in 2012 and the delay by the government to de-register the aircraft it was operating despite being a signatory to the Cape Town Convention had dented India’s reputation. Other Indian carriers suffered as lessors increased leasing rentals,” aviation expert Rajji Rai said.
