Chennai-based Paramount Airways has applied for permission from the government to restart airline operations, with two aircraft. It had closed operations last year, after disputes with aircraft leasing companies and withdrawal of its permit.
“Any new scheduled commercial airline can operate with two aircraft during the first year of operations. Whether Paramount’s return should be considered as its first year of operation or not is a matter being discussed by the Directorate General of Civil Aviation (DGCA),” said a senior civil aviation ministry official, who did not want to be identified.
According to the rules, any scheduled commercial airline should have at least five aircraft but can operate with two for the first year of operations.
Paramount started operations in October 2005 and was the only airline to offer full business-class service at prices comparable to the normal economy class fares of other airlines. The carrier used to fly to 21 destinations across the country and had a market share of 1.5 per cent. It operated with five leased planes, two Embraer 170s and three Embraer 175s.
Paramount’s business model was pegged on the tax rebate offered by the Union government for operating smaller aircraft. The airline got fuel at a cheaper sales tax rate of four per cent and also did not have to pay parking and landing charges to airports.
The sales tax on aircraft fuel in India averages around 27 per cent and constitutes around half of airlines’ total operating cost.
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The airline had to close after the DGCA de-registered three planes, following a dispute over payments with its lessors, GE Capital Aviation Service and Celestial Aviation Trading. The DGCA suspended its permit.
The Paramount Group is a Madurai-based textile company. The airline had ordered 10 A321-200 aircraft and had plans to launch short-haul international routes through those aircraft.
It had plans to start flying to Colombo, Bangkok, Hong Kong and Singapore, with West Asia and Africa later on.