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747-237 · Posted: Fri Dec 23, 2011 2:57 am Post subject: Govt to wind up Vayudoot

http://www.business-standard.com/india/news/govt-to-windvayudoot/459503/

Govt to wind up Vayudoot

December 23, 2011

Vayudoot, the government’s dream project to connect small cities, will soon become history. The civil aviation ministry is preparing a Cabinet note to close the airline, currently an arm of state-run Air India (AI).

“We have decided to close Vayudoot, but the final decision is to come from the Cabinet. We are preparing a Cabinet note and they (the Cabinet) are likely to take this issue next month,” said a senior ministry official, who did not want to be identified.

The government had planned to revive Vayudoot in the recent past to improve connectivity to small towns and cities. There were also plans to sell the brand.

In its new avatar, Vayudoot was to operate as a feeder service, bringing traffic from small towns to larger cities and state capitals and from there, to other national and international destinations.

As a part of the plan, it was to operate from states like Uttar Pradesh, Bihar, Madhya Pradesh, Jharkhand and the northeast region, which have over 50 small airstrips or airports, mostly not in use.

Plans were put in place to connect these smaller destinations with AI’s hub at Terminal 3 in the Delhi airport. As a part of the plan, the airline, which does not have any aircraft now, was to operate four types of aircraft depending on demand: 15-20-seat, 50-seat, 120-180-seat and 300-seat aircraft. These aircraft were to be taken on lease.

City-based Vayudoot was launched as an arm of the erstwhile Indian Airlines in January 1981 to serve the northeast region. At one point, it was operating across 100 stations in the country.

However, due to financial crises, Vayudoot was merged with Indian Airlines. It ceased operations in 1997 and the airline’s employees were absorbed by Indian Airlines or AI. Meanwhile, as a part of the turnaround plan, AI has plans to form two separate business units, one for engineering and another for ground handling.

The Cabinet has to decide on the formation of two units, infusion of Rs 6,600 crore as equity into the airline and deliveries of Boeing 787 Dreamliners.

AI has accumulated losses of Rs 20,000 crore since 2007. It has an overdue pegged at Rs 4,489 crore — Rs 2,600 crore to oil marketing companies, Rs 800 crore to airport operators and Rs 400 crore to other vendors. It has to repay Rs 20,415 crore of loans by the end of this financial year. It has Rs 42,350 crore of debt — Rs 20,185 crore aircraft loans, Rs 22,165 crore working capital loans and others being overdue.

The carrier’s fund requirements are huge and a group of ministers, headed by finance minister Pranab Mukherjee, had recommended an infusion of Rs 23,000 crore till 2020-21.
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The_Goat · Posted: Fri Dec 23, 2011 12:04 pm Post subject:

They still exist??? I thought they were merged with IC a long time ago, and ceased to function as an entity.
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I don't know which is the more pampered bunch : AI's widebodies (the aunties) or Jet's widebodies (the planes).
-Jasepl

HAWK21M · Posted: Sat Dec 24, 2011 12:57 pm Post subject:

Exactly....
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Think of the Brighter side !!!

jasepl · Member Joined: 26 Jul 2008 Posts: 4257 Location: bund-bay

Optimus.Prime · Posted: Thu Dec 29, 2011 6:38 pm Post subject:

jasepl · Member Joined: 26 Jul 2008 Posts: 4257 Location: bund-bay

747-237 · Posted: Thu Apr 12, 2012 6:34 am Post subject:

http://ibnlive.in.com/news/air-india-restructuring-equity-infusion-today/247909-7.html

The CCEA is also likely to decide on the issue of closing down the defunct state-run feeder air service, Vayudoot, by compensating Air India for its earlier losses.

Vayudoot, launched in 1981 and originally conceived to operate in the northeast, used to fly to over 100 destinations during its existence.

Its financial performance, however, deteriorated considerably, leading to its dissolution and merger of its assets into the erstwhile Indian Airlines (IA) in 1993. In April 1997, Vayudoot's flight operations were transferred to IA and its employees absorbed by it and the then Air India.

The government was a few years ago toying with the idea of re-starting Vayudoot to operate to smaller cities. However, the idea was given up later, the sources said.
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