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East West Airlines aims for a second stint
BY OUR AVIATION CORRESPONDENT
13 June, 2005: Almost ten years after it was grounded, East West airlines has started preparing the ground for a take-off. The airline is in talks with two foreign angel investors with a track record in investing in aviation firms, media reports say. A domestic investor also has evinced keen interest in reviving the now-defunct airline, according to a top East West Airlines aide.
The Airline, which was tainted with allegations of underworld links, hopes to get license by July-August this year for its revival programme. Donning a new avtaar as East West travel and trade links, the firm is also in talks with aircraft-makers Boeing and Airbus for buying aircraft. Aviation industry sources say the airline may need at least $25 million to start operations and $50 million to $60 million in two years. East West was the first private sector domestic airline, and made a mark in the domestic routes after the aviation sector was thrown open for private participation.
Interestingly East West’s revival plans come as low cost airlines have started making waves in the domestic aviation scenario. In a bid to woo the potential investors, East West aides have said that though the name of the firm which start operations would be East West airlines, the brand name would be decided only in consultation with investors.
East West started operations in 1993 with a single aircraft. In 1994, it added 2 more aircraft. In 1996, its MD Takiyuddin Waheed was shot dead in Bombay, adding fuel to the numerous charges of alleged underworld links. East West had embarked on a revival programme earlier also, and had planned to hit the skies in 1998, but the plan fell through.
Like East West, Modiluft had also started operations the same time and ended up in a mess. Now, it has taken a new avtaar as SpiceJet. SpiceJet now has a fleet of three aircraft, with the latest addition, a Boeing 737-800 aircraft, arriving today at the Indira Gandhi international airport today, according to a release from SpiceJet CEO Mark Wnders. SpiceJet plans to procure 10 new generation aircraft initially.
SpiceJet had informed the Bombay Stock Exchange that it plans to raise $90million through foreign currency convertible bonds, in a bid to fund its fleet expansion programme. SpiceJet started operations on May 23rd. The firm has entered into a pact with KLM for fleet maintenance.
But the fluctuating aviation turbine fuel (ATF) prices are always a concern for low cost airlines, according to analysts. Many doubt how long these no-frills airlines can survive in the market. In Europe, low cost airline boom was followed by a bust, which only a few competitors survived. Since low cost airliners depend on maximum utilization due to lack of stand-by aircraft, any technical snag would adversely affect the travelers as only a refund is made and no alternative travel arrangements are done.
BY OUR AVIATION CORRESPONDENT
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