KOCHI: A volatile global aviation environment, tightening capital flows and a deepening aircraft supply crunch are emerging as formidable barriers for Kerala-based airline ventures.
Nearly two years after securing a no-objection certificate (NOC) from the civil aviation ministry, Kochi-headquartered startup Air Kerala is yet to take off, caught in a web of financial constraints and industry-wide disruptions. The times are so dire that a change in ownership is also likely at the ultra-low-cost carrier.
“We are in talks with several interested parties. But nothing has been finalised as yet… discussions are on, and we will arrive at a decision in the coming weeks,” Air Kerala chairman Afi Ahmed told TNIE. “We have also not ruled out continuing with the carrier,” he added.
Another Kerala-based venture, Alhind Air, backed by the Kozhikode-based Alhind Group, is also navigating similar challenges.
The airline, which secured the ministry nod last December, had initially planned to purchase pre-owned aircraft instead of leasing them, aiming to tap into niche segments such as Hajj travel. However, rising upfront costs and shifting market dynamics have complicated the plans.“Lessors are asking for about Rs 200 crore as deposit for each aircraft. This is not feasible for a startup,” said a top source at AlHind Air, adding that several deals have fallen through due to the West Asia conflict.
Industry observers point to a confluence of global and domestic factors. Aircraft availability, already strained in the aftermath of the pandemic, has worsened due to supply chain disruptions and delayed deliveries from manufacturers. At the same time, leasing companies have turned increasingly cautious, reassessing risk exposure after high-profile failures in the Indian aviation market.
Geopolitical tensions add to uncertainty
“Lessors everywhere are hesitant amid broader scepticism about Indian carriers after recent failures,” said a former operations officer with Air Kerala, adding that “when you have an extremely low budget, any timeline slip becomes punishing.”
Geopolitical tensions, particularly in West Asia, have added another layer of uncertainty. With global capital becoming more selective and risk premiums rising, funding pipelines for aviation startups have narrowed considerably.
For Kerala-based ventures, many of which rely on diaspora-linked investments, this has translated into prolonged delays and renegotiations.
“There is a lot of uncertainty in the industry right now. Everyone is facing the same problem. Not just us,” said a source tracking developments in a Kerala-based airline.
Air Kerala and AlHind Air’s struggles illustrate the cascading impact of these headwinds.
Experts say this is not an isolated case but indicative of a wider structural bottleneck. “Access to aircraft has become the single biggest constraint for new airlines globally. When combined with limited capital buffers, even minor delays can derail timelines,” said a veteran with decades of experience in top-tier airlines.
“If aircraft come through, operations can still happen,” staff at AlHind Air maintained optimistically. A senior management official seconds this. “If we get an aircraft, we will start operations in about four to six months,” he added.
The same optimism runs at Air Kerala as well.
“We are only one aircraft away from flying. That said, we are also waiting to see how the management change, if it happens, will improve things,” a staffer said.