Why Kerala’s two private airline projects have hit an air pocket

Faced with financial headwinds, market uncertainty, and the escalating West Asia conflict, Kerala’s two ambitious private airline projects – Air Kerala and Alhind Air – have hit an air pocket, forcing the airlines to postpone their immediate launch plans. Though both airlines were expected to begin operations last year (2025), uncertainty has derailed their plans, exacerbated by geopolitical tensions and investment woes.

Speaking to The Hindu, a senior official associated with Air Kerala said although the airline had gone ahead with plans to launch services from Kerala, with the Cochin international airport as the hub of its operations, delays in acquiring aircraft have upset its plans, as aircraft leasing firms have tightened leasing norms.

“However, we are hopeful that there will be a positive development soon. The airline is still working on the project and plans to start operations with one aircraft out of the three ATR 72 aircraft it had planned to induct into its fleet in the first phase,” the company representative said.

The company has also secured the necessary clearances, including a no-objection certificate (NOC) from the Directorate General of Civil Aviation (DGCA), and the airline code 'KD', representing 'Kerala Dream', from the International Air Transport Association (IATA).

On the other hand, Kozhikode-based Alhind Air, which was aiming to begin operations from south India with a fleet of ATR turboprop aircraft, has decided to go slow on the project owing to investment uncertainty and global aviation challenges triggered by the West Asia crisis. Apart from global factors, the airline recently suffered a setback when an arbitral tribunal ruled in favour of an aviation consultancy in its contractual dispute with Alhind Air Pvt. Ltd.

According to Valsaraj P. V., managing director of Alhind Air, the tribunal order is not a major setback, as the airline has been directed to pay only ₹5 lakh. The airline decided to slow down the project mainly because of geopolitical tensions and their cascading impact on key sectors.

“We have not shelved the project, but are carefully reviewing the situation. After analysing market trends, we will possibly launch services by 2028-2029 period, or by 2030,” he said.

Alhind’s plan was to begin domestic services with ATR 72 aircraft before eventually expanding to West Asian routes, tapping into the strong India-West Asia travel demand.

According to industry sources, the launch of operations by both airlines will depend on an improvement in global conditions, along with their ability to gain the support and confidence of investors.