The Kerala-based Alhind Air, which received its no-objection certificate (NOC) from the ministry of civil aviation in December, is likely to face delays in starting commercial operations due to problems in acquiring aircraft and closing financing arrangements, according to a Financial Express report.
Sources familiar with the matter told FE that the airline has been scouting for aircraft for several months, but has yet to finalise any deal. The delay has also slowed progress on the next round of regulatory approvals required to begin flights.
The airline had earlier planned to start operations with three ATR 72 turboprop aircraft and gradually expand its fleet to seven. To keep costs under control, Alhind has been exploring the purchase of pre-owned ATRs that are four to five years old, instead of placing fresh orders with manufacturers.
People close to the airline said Alhind has cited aircraft availability constraints. However, industry executives argue that supply is not the core issue. Pre-owned ATR aircraft are currently available in the global market, and several Indian regional carriers are expected to induct similar planes in the coming months.
According to sources, the bigger challenge is financing. While leasing aircraft is usually easier for new airlines, Alhind is understood to prefer outright purchases to reduce long-term operating costs. Aircraft ownership, however, requires large upfront capital and strong lender confidence, both of which remain limited at this stage.
Most of the funding for aircraft acquisition is expected to come from the company itself. Efforts are also under way to bring in external investors, but no firm commitments have been secured so far.
Delays between Alhind’s original launch timeline and the eventual issuance of the NOC have increased holding costs. To conserve cash, the airline has placed a majority of its employees on leave without pay, according to people aware of the situation.
Without confirmed aircraft contracts, Alhind Air cannot apply for an air operator’s certificate (AOC), the final approval needed to start flights. Once operations begin, the airline plans to base its services out of Kochi, connecting the city to destinations across southern India, including select routes under the government’s UDAN regional connectivity scheme.