Air Costa temporarily halts services, admits financial issues

Financial issues are responsible for the suspension of services by Air Costa

Vijayawada-based airline company, Air Costa, has suspended the services from Tuesday, second time in less than six months, due to few unspecified financial issues with an aircraft leasing company.

Air Costa spokesperson said all the schedules flights were cancelled on Monday night for a period of two days and the services would resume again from Thursday. The spokesperson has cited certain unspecified financial issues with the lessor of the aircraft as responsible for the suspension of services by Air Costa.

The three-year-old airline company currently uses 2 Embraer (EMB-190s) aircraft leased from GECAS, a unit of GE Capital.

The regional carrier had grounded the aircraft in a similar fashion in August last year. Interestingly, the LEPL Group-promoted airline company had received the NOC to operate pan-India services in October, 2016 as it had set out to introduce flight services on the new routes by roping in a couple of more aircraft for which it already had a lease agreement with GECAS.

However, in the absence of fresh capital infusion the waiting for the third-aircraft has only got longer. It has also not participated in the recent bidding conducted for the regional connectivity.

The promoters' inability to conclude the ongoing negotiations with some strategic investors to raise funds in time was said to be the basic reason for the airliner's financial problems. Air Costa spokesman Kavi Chaurasia said the company was in advanced stages of negotiations with strategic investors and an announcement in this regard would follow soon

Due to suspension of services, Air Costa flights connecting Ahmedabad, Bengaluru, Chennai, Hyderabad, Tirupati, Jaipur, Vijayawada and Visakhapatnam will not be available for Tuesday and Wednesday.