East West Airlines awaits takeoff

Talks with creditors on

BY A CORRESPONDENT
March 2006

East West Airlines, one of India's first scheduled airlines launched in 1993, is now looking to re-enter the aviation industry as Indian aviation witnesses a boom.

East West had wound up in 1996 after its MD Thakiyuddin Wahid was shot dead by the underworld in 1995, giving substance to rumours of underworld links. A recent media report quoted East West Airlines managing director Faisal Wahid as saying that the company plans a launch within three months with five leased Boeing aircraft and will service Mumbai, Chennai, Bangalore, Delhi and Nagpur.

East West Airlines plans to set up its engineering base in Hyderabad or Bangalore. Later, the airline will fly to Category II and III airports. East West wants to fly to all airports it was flying ot earlier.

ModiLuft, another private airline which was wound up in the nineties made a comeback last year under the brand name Spicejet. East West Airlines is also expected to take a low-cost avatar in its rerun.

The planed re-entry, however, has been delayed by three months. East West now wants to tie up all loose ends before making a comeback. "Our scheme of compromise with secured and unsecured creditors has been passed but there are a few queries from them, which we have to respond to," Mr WahiD told DNA.

Trying to avoid any legal complications, East West Airlines is looking to strictly follow the letter of the law, in trying to work out a compromise with a consortium of nine banks that will involve a waiver of interest. Two teams of lenders will be addressing the airline's credit issues. For now, State Bank of India heads the bankers' team for travel and Indian Bank leads the team for aviation.

Wahid also said that the creditors wanted to be convinced of the financial viability of the airlines' planned second re-entry, and that once the financial knots were sorted out, the airline could successfully take off.