Mumbai: With a British court awarding Rs 1,650 crore compensation in a law suit, defunct Paramount Airways is working on a revival plan and talking to overseas carriers for investment, according to industry sources.
"Paramount is quite upbeat over the Rs 1,650 crore compensation awarded by a London-based international arbitration court. With this money on the table, the carrier has initiated its efforts to take to wings again," a source close to the development said.
With the aviation regulator DGCA giving its nod to the airline to restart operations a couple of months ago, the airline is now in discussion with certain foreign carriers, taking advantage of the recent liberalisation of the FDI policy in aviation.
In all probability, the airline may take off again by the early next fiscal, the sources said.
"Paramount promoters recently held preliminary discussions at the board level with some Far-East based carriers and a Gulf-headquartered airline to rope in one of them," the source said, adding one top official of a low-cost carrier held deliberations in Coimbatore to explore investment possibilities.
"However, the airline has not yet decided whether it should relaunch the carrier with the same business model of full-business class or it should go with the trend of no-frills model," the source said.
Director General of Civil Aviation (DGCA) had suspended Paramount Airways in April 2010 for its failure to maintain the mandatory minimum of five aircraft in its fleet.
Paramount, which had an original fleet of five leased aircraft, was operating with a single one at that time as three of its planes were de-registered on account of default in payment.
ECC Leasing Company Ltd, a wholly-owned subsidiary of Brazilian aircraft maker Embraer EBA, had also requested DGCA to de-register the remaining two aircraft on grounds of payment default.
But the airline had contended in the London court that it had held up payment due to lessor-manufacturer default in the engines and had spent more on its maintenance because of this.
The July 2005 agreement between Paramount and the lessor -manufacture group for the three aircraft with two CF34-8E5A1 engines each were supplied with manufacturing defects that had created substantial financial losses to the airline and had ultimately resulted in cessation of its business, the airline had contended in its petition.
On November 12, the London Court of International Arbitration while allowing Paramount's application for relief compensation, ordered the leasing company to pay Rs 1,650 crore as compensation.