Air Deccan was to commence operations on Jamshedpur- Kolkata route by September 30 last year.
The Union minister of state for civil aviation said the carrier did not have the 19-seater aircraft required for the flight service and had to import the aircraft, recruit pilots and other crew members, which caused the delay.
"We have given them the last chance to start the service from February 15. And we will allot it to some other aviation company if they fail to meet the deadline," he told reporters.
Sinha said the steel city Jamshedpur is an important industrial and business centre, and flight service is required to improve air connectivity.
He was here to participate in the 'City Data for India Conclave 2018' organised jointly by Tata Steel, Tata Trust and Confederation of Indian Industry (CII).
Referring to the 'Udaan' scheme, he said applications for Bokaro/Dhanbad-Kolkata and Ranchi-Dumka air services have been received during the second round of bidding.
Besides, the government has plans to expand the helipad in Jharkhand to promote spiritual tourism and link religious places with air services, he said.
Sinha, who was in the city to also inspect the proposed site for a new airport at Dalbhumgarh in Ghatsila sub-division of East Singhbhum district and feasibility for expansion of Tata Steel's Sonari Aerodrum, said the construction of the airport would begin by the end of next year.
About 150 acres of land has been identified for the project, Sinha said.
The minister said a new airport would also be constructed at Nagwa in Hazaribag district, where 200 acres of land has been identified.
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