Deccan Aviation Lanka (Pvt) Ltd is not pursuing its planned international flight operations due to the financial inevitability and not because of red tape, according to top officials.
"All our financial modelling does not indicate a profitable situation currently on regional and short haul routes. This is the reason we did not go ahead with it. It has to do with pure economics and not red tape," Suren R. Mirchandani, Managing Director of the company told The Sunday Times FT.
The industry was abuzz some time ago with some saying that government red tape had stalled many contenders’ plans to take to the sky. Some industry officials had also expressed the view that these companies may never get a chance to operate international flights as the government budget airline, Mihin Air did not want any competition.
"You might find the other contenders (for an Air Operating Certificate (AOC) who want to start international flights) claiming red tape as an excuse, but the fact of the matter is if you really want to get it done, it could have been done," he pointed out, adding that any investor faced with the prospect of a good economic return, will 'fight through all that red tape'.
"Red tape is a convenient excuse when you do not want to go forward. We never encountered red tape, because we made the decision well before (not to go ahead) we even proceeded," he said.
Mr. Mirchandani noted that there is over capacity in the regional sector. "Between Colombo and Chennai, there are six daily flights. Low cost players with massive economies of scale are going to win the day. Getting into regional routes as a small player and competing with people who have 60, 70 aircraft is not a very smart thing to do, unless you have a big ego," he added.