Right after exiting the board of low-cost airline SpiceJet last year, Ajay Singh has initiated the system of investing in another carrier — the beleaguered MDLR Airlines — hoping to breathe new life into it.
Online PR News – 16-February-2011 – – Right after exiting the board of low-cost airline SpiceJet last year, Ajay Singh has initiated the system of investing in another carrier — the beleaguered MDLR Airlines — hoping to breathe new life into it. New Delhi-based MDLR, a regional carrier, stopped operations in November 2009 after defaulting on lease payments to BAe for its Avro RJ70 aircraft. According to a source during the know, Singh, who had promoted SpiceJet along with London-based NRI Bhupendra Kansagra, has sought the Ministry of Civil Aviation’s permission to select up around 23% stake in MDLR. “He (Singh) has employed towards Ministry of Civil Aviation to purchase stake in MDLR Airlines to revive its operations. The software program is becoming processed and the ministry has sought clarifications over a source on the fund,” mentioned the source.
The source, who spoke on condition of anonymity, did not disclose the price at which Singh was buying the stake. MDLR, which began operations in March 2007, was founded by Gopal Goyal Kanda, a politician from Haryana, and is wholly owned by Murli Dhar Lakh Ram (MDLR) Group. The company’s schedule airline operating allow has turn out to be defunct as all of the aircraft in its fleet have been deregistered by the Directorate General of Civil Aviation (DGCA) for over a year now. However, its airline operating allow is nonetheless valid. Singh could not be reached over a phone for your response plus a text message sent to him remained unanswered.
A senior executive with another airline, who did not desire to be named, mentioned even if Singh succeeds in owning stake in MDLR, he will have to begin operations from scratch. “He will have to get brand new aircraft, set up new engineering and maintenance facility and begin all over again. It will be like setting up a brand new airline, except for applying for the airline operating permit,” he said. Despite stepping down during the SpiceJet board in August last year, Singh continues to keep around 5% stake during the budget airline even after media baron Kalanithi Maran bought over a majority stake of 37.7% in Spicejet.
Singh, and also the Kansagra family, had re-launched the bankrupt Modiluft Airlines in 2005 after taking it over from industrialist SK Modi, who operated the airline in partnership with Lufthansa in mid-90s. SpiceJet fought a lengthy legal battle with Modi to settle a dispute over 11.5 million shares on the airline, which the Modiluft promoter claimed have been nonetheless owned by him.
Modiluft was reincarnated as SpiceJet, and is these days the second-largest budget airline after IndiGo, having a marketplace share of 12.9%.
Source: DNA India