Air Costa seeks ministry nod for pan-India license; fund raising plans on card

New Delhi: Regional airlines want to fly across the country and at least one startup is in talks with a foreign airline for possible equity participation even before getting permission to fly. The interest in India’s aviation sector does not seem to diminish, never mind the punishing cost structure in which airlines are forced to operate in this country. [caption id=“attachment_2530358” align=“alignleft” width=“380”]  Reuters[/caption] A senior official in the ministry of civil aviation said today that Vijayawada based Air Costa, a successful regional player, has sought permission from the ministry to go for a pan-India license. “We have sought more details from Air Costa and the matter is still pending,” this official said. Air Costa’s current fleet size is four Embraer aircraft and will three more aircraft by January. The airline applied for a pan-India license in August and wants to fly to Delhi and Bengaluru once the permit is granted. As of now, the airline connects nine stations across seven airports, mainly in Southern India. Deputy CEO Vivek Choudhary said Air Costa has been in talks for raising undisclosed amount of funds to spearhead expansion. “We are looking at private equity or a strategic investor but right now we are too small. Perhaps we will get better valuation after we grow to become a pan-India player,” Choudhary said. The ministry wanted to know from Air Costa whether it will retain its regional flying permit once it is given permission to fly pan-India to which the airline has already communicated to the ministry that it will surrender its regional permit once a national permit is with Air Costa. The official quoted earlier also confirmed that FlyEasy, the Bengaluru based startup airline, which received an initial No-Objection certificate from the ministry about 18 months back, has sought yet another extension. It is interesting to note that FlyEasy has sought this extension amid reports that it is in talks with Sharjah based LCC Air Arabia for a possible 49% equity partnership. India allows foreign airlines to pick up equity in Indian carriers up to 49% only. When any entity needs a flying permit, it must first get an initial NoC from the ministry before it begins the process of applying for a permit to the DGCA. FlyEasy has seen three extensions of NoC according to this official but has not yet filed for a permit. Earlier, FlyEasy was mulling whether to apply for a national flying permit instead of a regional one.