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State-run defence aircraft maker Hindustan Aeronautics Ltd (HAL) may start selling planes for civilian use in India.

HAL has so far been producing 19-seater Dornier 228 planes for the Indian Air Force and the Coast Guard and exporting it to other countries.

It has sought the permission of the civil aviation regulator Directorate General of Civil Aviation (DGCA) to sell these planes to domestic airlines.

“The application was submitted (a) few months back and the certification process is on," said a government official who declined to be named.

HAL manufactures the Dornier 228 planes in Kanpur.

“They have expressed interest if they can get some sort of a firm commitment (aircraft orders) for these planes. We are looking into it," said a second government official, who also declined to be named.

Dornier planes were being used widely by Vayudoot airline in the 1980s and ’90s to connect smaller cities such as Raebareli and Lucknow. Vayudoot was grounded in 1997.

HAL has since made modifications to the plane and its equipment and it needs to go through a fresh certification process overseen by the DGCA.

The history of the Dornier aircraft goes back to 1983, when India signed a licence-production and phased technology-transfer agreement with Germany’s Dornier GmbH.

The agreement allowed HAL to set up a separate production line in India.

The first aircraft was manufactured in 1985.

By 2014, a total of 125 Dornier 228s had been produced in India. While the original production line in Germany was shut down in 1998, HAL continued to manufacture the planes in Kanpur and defence became the focus for the company.

With the civil aviation ministry unveiling a new regional aviation policy, HAL sees huge potential for its planes.

The new policy envisages giving subsidy on new routes started by airlines that are either not served or underserved.

Under the new policy, airlines will be given a subsidy on some of the seats on such flights from a annual corpus of 500 crore.

“HAL is getting two Dornier 228s, which the company will make available to interested carriers to run regional flights," a HAL spokesman said.

HAL also said that it is keen to manufacture aircraft for regional operations with a larger seating capacity.

A request for information was floated in April and six responses from global aircraft manufacturers have been received for partnerships.

However, no time-frame has been set for the next step.

In stakeholder consultations last month, the civil aviation ministry debated as to what kind of planes are likely to make commercial sense for regional flights.

An expert said airlines need to do a cost-benefit analysis of the routes that Dornier planes can run profitably.

“When Vayudoot operated the Dornier, they were losing money even if they had full occupancy on the Madras-Pondichery leg," said Mohan Ranganathan, a Chennai-based analyst.

“So, they have to figure out the ideal load factor and ideal trip length before venturing into this. The best way would be to get operating cost figures from airlines in Nepal, who have been using them widely."

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Updated: 30 Aug 2016, 09:12 AM IST
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