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Air Kerala and Alhind Air Face Challenges Amid Global Tensions and Leasing Issues

Air Kerala and Alhind Air Face Challenges Amid Global Tensions and Leasing Issues
Delays in Launch Amid Financial and Geopolitical Pressures
The launch of Kerala’s private airlines, Air Kerala and Alhind Air, has encountered significant setbacks due to a confluence of global geopolitical tensions, financial constraints, and evolving conditions in the aviation leasing market. Originally scheduled to commence operations in 2025, both carriers now face considerable uncertainty regarding their timelines and operational viability.
Air Kerala, based in Kochi and envisioned as the state’s first private airline aimed at providing affordable travel options for expatriates, has struggled to secure both investors and aircraft. Although the airline obtained a No Objection Certificate (NOC) from the Directorate General of Civil Aviation (DGCA) in 2024 and was assigned the ‘KD’ airline code by the International Air Transport Association (IATA) in May 2025, it has yet to finalize its fleet acquisition. The airline’s initial plan to deploy five ATR 72 aircraft for regional routes was disrupted after a leasing agreement with an Irish firm collapsed.
Impact of Leasing Market Dynamics and Rising Costs
The difficulties faced by Air Kerala and Alhind Air are further exacerbated by recent shifts in the global aviation leasing sector. The acquisition of Air Lease by SMBC Aviation Capital and its partners has intensified competition among lessors, making it increasingly challenging for smaller airlines to negotiate favorable leasing terms. Following the collapse of Indian carriers such as Go First, leasing companies have imposed stricter requirements, including demands for up to 12 months’ advance lease payments or proof of liquidity amounting to ₹200 crore.
In addition to leasing challenges, both airlines are grappling with rising fuel costs and the financial repercussions of ongoing conflicts in the Middle East. These factors have placed additional strain on operational budgets, compelling the carriers to scale back capacity growth plans and manage increased expenses.
Uncertain Future Amid Efforts to Secure Investment
Despite these obstacles, Air Kerala remains committed to its long-term vision of expanding its fleet to 20 aircraft, including Airbus A320s for international routes. A company representative, speaking anonymously, confirmed that the airline is actively seeking new investors to move forward. Alhind Air faces similar hurdles as it navigates the complex financial and geopolitical landscape.
The evolving global aviation leasing environment, combined with heightened financial scrutiny and geopolitical instability, has cast doubt on the immediate future of both airlines. As they continue efforts to secure investment and adapt to a more challenging market, their ambitions to enhance connectivity for Kerala’s expatriate community and strengthen regional air travel remain on hold.

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