EasyAir budget airline launch in November

New budget airline from Premier Airways started by NRIs in US

BY A CORRESPONDENT
April 24, 2006

EasyAir, a new Indian budget airline is getting ready for launch in November this year. The airline will be launched by the Chennai-based Premier Airways Ltd, a startup company funded by some NRIs in the US. Premier Airways has applied for the necessary governmental clearances and is hopeful of a launch in 2006.

Premier Airways is chaired by the US-based Umapathy Pinaghapani. In India, EasyAir will be headquartered in Chennai. The company feels that the demand for air travel is strong in South India. Other South-based airlines include Air Deccan and Paramount Airways. The Kerala government also has plans to start a new airline called Air Kerala.

EasyAir is negotiating for leasing aircraft. It is expected that Premier Airways, which will be started with a capital of $60 million, will select either the Airbus SAS A320 or Boeing 737. EasyAir will be launched with a leased aircraft fleet of five planes, which will be expanded to 40 planes in five years. According to EasyAir founders, the airline will be modeled after the discount carrier Southwest Airlines in US. EasyAir will be pitted against other low-budget airlines in India including market leader Air Deccan and GoAir.

Umapathy Pinaghapani currently runs a software business in the US. He will be investing $20 million into the EasyAir launch, along with other partners. EasyAir will also be looking for private equity investment to power up the airline launch.

In the last one year, six new airlines were launched in India - Air Deccan, Kingfisher Airlines, SpiceJet, Paramount Airways and GoAir. Six more - Magic Airlines, East West Airlines, Omega Airlines, IndiGo Airlines, AirOne and now, EasyAir are due for launch this year.

Of these, Magic Airways has been caught up in regulatory hassles. This is because Nira Radia, promoter of Magic Airways, is a Person of Indian Origin (PIO), a category which is not allowed to hold critical stakes in domestic airlines. By contrast, NRIs are allowed to start airlines in India. East West has been bogged down in talks to settle creditor's dues, while Omega Airlines plans are unknown.