BackVRL Logistics to withdraw plans to launch regional airline
VRL Logistics promoter Vijay Sankeshwar says the firm has cancelled plans to launch a regional airline, cites an adverse civil aviation policy
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Mumbai: Promoters of VRL Logistics Ltd Wednesday said they have cancelled plans to launch a regional airline, citing an adverse civil aviation policy.
“We had expressed our intention of commencing a regional airline. Subsequently, there have been several developments including the announcement of the new aviation policy by the center. The regional connectivity related aspects listed in the said policy do not augur well with our planned business model envisaged for the proposed activity," company’s promoter Vijay Sankeshwar said in a notification to the stock exchanges.
On 24 May, VRL Logistics said its promoters Vijay Sankeshwar and Anand Sankeshwar planned to start a regional airline and may sell as much as 2% in the logistics company to raise money for their new venture. “We may seek to dilute a portion of our present day holding in VRL Logistics in order to provide us with liquidity to enable our investment for the aviation venture," the promoters had told the stock exchanges back then.
VRL was founded in 1976 by Vijay Sankeshwar in Gadag, a small town in north Karnataka with a single truck. The company gradually expanded its services to Bengaluru, Hubli and Belgaum.
In August 2007, the ministry of civil aviation had introduced so-called scheduled operator permits for regional airlines to increase air services to smaller cities. Regional airlines are required to operate in small towns within one of the designated regions—north, south, west, east and the north-east region. But they are not allowed to connect to more than one major city, except those licensed to fly in the southern region.
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