Kerala Government's Air Kerala Project: A Bid to Resurrect the State's Aviation Sector

Strategic Insights -

As the Indian government is considering relaxing the 5/20 rule, which requires domestic airlines to have a minimum of five years' experience and 20 aircraft to operate internationally, Kerala's state government-initiated Air Kerala project is gearing up to take off. The airline aims to serve the state's 2.5 million non-resident Keralites (NRKs) in the Gulf region by providing them with affordable and efficient air travel. While the companies, including Vistara, Air Asia, Air India, Jet Airways, IndiGo, SpiceJet, and Air Kerala, are lobbying to abolish the rule, the government is expected to make a decision soon. If the rule is relaxed, it may provide a significant boost to the state's aviation sector, which has been struggling to attract investment and tourists.

Key Takeaways:

  • The Kerala government's Air Kerala project aims to serve the state's 2.5 million NRKs in the Gulf region by providing affordable and efficient air travel.
  • The 5/20 rule, which prohibits domestic airlines from operating internationally, may be relaxed by the government to reform the civil aviation sector.
  • The rule is seen as outdated in the modern aviation industry, and its relaxation will benefit many airline companies and individuals.
  • The state's Cochin International Airport Limited had launched a subsidiary, Air Kerala International Services Ltd, in 2006, which has a paid-up share capital of Rs.1.06 crore.
  • A feasibility report found that if domestic operations are launched, the Air Kerala project will incur a loss of Rs.300 crore to the state exchequer within five years.
  • Non-Resident Keralites Affairs Minister K C Joseph is hopeful that the government will relax the 5/20 rule to benefit the Air Kerala project and the state's aviation sector.

Sources:

  • HT Syndication
  • New Indian Express
  • Article: "Kerala government to start its own airline, Air Kerala" published on January 17 (no date mentioned)

Statistics:

  • 2.5 million: The estimated number of non-resident Keralites (NRKs) who will be served by the Air Kerala project.
  • Rs.1.06 crore: The paid-up share capital of Air Kerala International Services Ltd.
  • Rs.300 crore: The estimated loss incurred by the Air Kerala project within five years if domestic operations are launched.
  • 5/20 rule: The regulatory norm that prohibits domestic airlines from operating internationally.