Vijayawada: Vijayawada-based airline Air Costa has wound up operations after the aviation regulator suspended its flying licence.
The Directorate General of Civil Aviation (DGCA) has acted against the airline as it did not operate its flight for the last three months. If the airline did not begin its service in the next two months, it could lose the licence permanently.
Air Costa is the second regional carrier, after Air Pegasus, whose air operator permit has been suspended by the DGCA in the last eight months.
Air Costa CEO Vivek Chowdary said the airline was trying to come up with new plans to overcome the financial crisis, which inc-ludes getting private equity to restart the services.
The main reason for winding up services, he said, was lack of service hangars for the company’s Embraer E-190 and E-170 aircraft, in India, so the airline had to go for Jordon which costs more and is untenable for regular services.
Air Costa, which began its operations in 2013, ran services to Jaipur, Ahmedabad, Hyderabad, Tirupati, Chennai and Bengaluru after obtaining a pan-India licence.
In August 2016, operations were halted temporarily, but resumed after a few days. After failing to resolve financial issues with its lessor, the airline suspended operations on February 28, 2017. The troubled airline failed to pay employees’ salaries, and later issued post-dated cheques to them. The employee strength has come down from 750 to 70.
In March, DGCA deregistered its two aircraft, which were impounded by aircraft lessor GE Aviation Services after Air Costa defaulted on payments.
