NEPC Airlines and its subsidiary, Skyline NEPC, have been grounded.The International Air Travel Association (IATA) has suspended them for non-payment of dues following which they have been taken off the computerised reservation system (CRS).
The cash-starved, Chennai-based airlines owed money to Indian Oil Corporation (IOC), which impounded their aircraft for non-payment of dues.
Last month, the pilots of both the airlines went on a strike following suspension of some of the aircraft commanders. This had led to further losses for the airlines. The airlines fleet consists of nine Fokker planes and five Boeing 737-200s.
NEPC, however, refused to confirm the grounding of its fleet. Ravi Prakash Khemka, chairman of the food-to-wind power conglomerate, was not available for comment.
The airlines generated Rs 350 crore revenues in the previous fiscal and was expected to achieve a turnover of Rs 400 crore by the end of March 1998. R P Khemka had claimed last year that he had pumped in around Rs 110 crore in his airlines business which included acquisition and leasing of new aircraft.
NEPC is the fourth major private airline in the country to suspend operations since the Union government announced an open skies policy in 1992. East West Airlines and ModiLuft suspended their operations after facing huge operational losses. The ailing Damania Airways was sold off to the NEPC group. The Khemkas took over control of Damania in which it picked up less than five per cent equity stake and later made a public offering to pick up 25 per cent equity from the public.
The group created a major stir last year when it made an open public offer to pick up 48 per cent equity (about 3 crore shares) in Modiluft in a hostile takeover bid for the airline. The group offered to pick up shares at Rs 29 per share which would have cost it around Rs 87 crore. However, the bid turned out to be unsuccessful as it did not conform to Sebi regulations.
At one time, the group was also planning to acquire UP Air a joint sector airline, which flies on feeder routes in Uttar Pradesh and Gujarat Air, a company promoted by the Suchantis who also control Pressman Advertising. Both Gujarat Air and UP Air own two Fokker aircraft each.
The group was also negotiating with Air India for leasing out some of its aircraft in the domestic sector to carry passengers from various cities in the country to international airports.