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Indus Air, a regional airline, has suspended operations from last week, just three months after its commercial launch.
Sources from the government said financial problems had led to the suspension of operations. Operated as a full-service airline from mid-December 2006, Indus Air was promoted by liquor company Mohan Meakins.
In the 1990s, the country had witnessed Damania Airways, East West, NEPC Skyline, ModiLuft and Archana Airways winding up operations, owing to increased competition and lack of government support.
At present, there are nine domestic scheduled passenger airlines -- Indian, Jet Airways, Air Sahara, Air Deccan, Kingfisher Airlines, SpiceJet, Paramount Airways, GoAir and IndiGo apart from Indus Air.
According to the industry analysts, domestic airlines are expected to make a cumulative loss of Rs 1,800 crore (Rs 18 billion) to Rs 2,250 crore (Rs 22.5 billion) in 2006-07 in the overcrowded Indian aviation space.
Indus Air Director Krishnan Gopal Beri confirmed the suspension of commercial operations.
"We have suspended operations temporarily owing to the shortage of spare parts. We have requested aircraft leasing company GE Commercial Aviation Service to avail parts of Bombardier aircraft. Safety is the most important aspect and the moment we get the necessary spares, we will start operations," Beri told Business Standard.
An airport representative of Indus Air said the passengers who had booked tickets in advance would get refunds.
Indus Air, which holds a scheduled operating licence, was connecting feeder routes such as Amritsar and Chandigarh to Mumbai and Delhi with two 50-seater Bombardier CRJ 200 aircraft. The airline served food and other facilities during travel unlike budget carriers.
A senior government official pointed out that the airline had failed to pay lease rentals of its two aircraft, which led to cancellation of registration of the aircraft.
"The ministry of civil aviation will take a final call on the licence status of Indus Air considering the changed norms of operations,"the official added.