New airline hopes to connect NE cities from 1 October

Northeast Shuttles Pvt Ltd, a Kolkata-based company, plans to start operations as a scheduled airline in the northeastern region from 1 October.

The carrier will initially operate flights to northeastern cities like Guwahati, Lilabari, Silchar (in Assam), Agartala and Aizawl (in Tripura), Imphal (Manipur) and Dimapur (Nagaland).

It will later extend flights to eastern cities of Kolkata, Ranchi, Patna, Gaya, Rourkela and Jamshedpur, although there is no timeframe as yet.

Set up in 2008, Northeast Shuttle Private Limited has received an initial `No Objection Certificate' from the civil aviation ministry to operate a schedule air transport (regional) services in the region.

The company plans to start regular airline operations with two aircraft that will be delivered by September this year and the other two a year later, according to Shobha K Mani, managing director of Northeast Shuttles.

The airline plans to increase its fleet to six by purchasing four Bombardier CRJ200 jets at an estimated cost of Rs100 crore. This is expected to be complete by September 2014.

Once the airline takes off and the necessary fleet is in place, Mani said the airline would fly to new grounds covering the eastern cities of Kolkata, Ranchi, Patna, Gaya, Rourkela and Jamshedpur.

Northeast Shuttles, which started operations in 2008, however, has been clocking very low revenues, of around Rs7 crore, over the past two years.

Currently, cargo accounts for nearly 50 per cent of its revenues.

Raising money will, however, be a real problem for an airline with low earnings.

Mani and the two other promoters of Northeast Shuttles are willing to divest up to 49 per cent of their stake in favour of either private equity players or other investors.

The only condition is that the investor should have a North East focus.

Mani and Tripura-based entrepreneur Bhanumati Nath Deb Barman jointly own 67 per cent in the airline while Gomukhi Construction owns the remaining 33 per cent.

Northeast Shuttle, meanwhile, is awaiting technical clearances from the Director General of Civil Aviation (DGCA) before starting regular operations.