Five new airlines likely to join Indian skies

While decision to grant them operating licenses have not yet been taken, new guidelines would be in place in the proposed Civil Aviation Policy.

As many as five companies have applied for licences to launch new airlines in the country, Civil Aviation Secretary Ajay Prasad said on Wednesday.

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While decision to grant them operating licenses have not yet been taken, new guidelines would be in place in the proposed Civil Aviation Policy, he told reporters on the sidelines of the Indo-US Economic Summit in New Delhi.

His remarks came in the backdrop of government sources saying that a fresh look was required to be taken in regard to the entry barriers for new airlines to come up.

Maintaining that there was no clampdown on issuing of fresh licenses to such aviation firms, the sources had said there was a need to revise the existing entry barriers to encourage "serious players" enter the aviation market.

Under the existing guidelines, a new airline has to have a fleet of five aircraft and an equity capital of at least Rs 30 crore, among other things, to get a scheduled operator license allowing them to operate in the domestic sector with a published timetable.

The sources had warned of a "shakeout" among the existing private carriers as was witnessed in the 1990s, if they did not take immediate steps to maximise their yield and meet at least their operating expenses when the dynamics of the aviation industry was changing very fast.