Protests, failure to get DGCA clearance dashed hopes of seaplane investors in 2013

Investors burnt fingers in Kerala seaplane project, facing bankruptcy, while recent changes in regulations pose challenges for future investments.

As Kerala celebrates the successful demonstration of a seaplane service, there are some investors who had burnt their fingers investing in the seaplane project of the Kerala government way back in 2013. Most of these companies were either closed down or became bankrupt due to mounting debts.

A promoter of Kochi-based Kairali Airline told The Hindu that they had sustained a loss of ₹8 crore by bringing an amphibian aircraft, the Cessna Caravan, which was once owned by Microsoft co-founder Bill Gates, for launching the seaplane service in the State. Another company, Kairali Aviation, had brought a Cessna 206 H amphibian aircraft to the Cochin International Airport after taking it on lease from a Dubai-based company.

However, both aircraft couldn’t touch down on the waters in the State following strong protests by Left trade unions against the project piloted by the then United Democratic Front (UDF) government. As uncertainty continued over the launch of the service, both the aircraft were returned, inflicting losses to the tune of crores of rupees to the investors.

Malayali pilots Captain Sudheesh George and Captain Sooraj George, who set up a company named Seabird Seaplane Private Limited based in Kochi in 2012, along with a group of investors, have another story to tell. They purchased an aircraft Quest Kodiak 100 amphibian from the U.S. After customising to suit the Indian conditions, they took the aircraft from the South St. Paul airport in the United States to Kerala, flying over four continents—North America, Europe, Africa, and Asia— in weather conditions varying from -20° Celsius to 50° Celsius.

They had spent ₹15 crore, including a ₹4.5-crore loan from the Federal Bank, for purchasing the aircraft to start services from Kerala to Lakshadweep. However, things went into a tailspin after the aircraft landed at Cochin International Airport. Though the political situation in Kerala had turned volatile over the project, the company was hopeful of starting service from airports in Kerala to waterbodies in Minicoy and Kavaratti. They had also conducted a test run. However, the company failed to get the mandatory clearances from the Director General of Civil Aviation (DGCA) and the aircraft remained idle in an isolated bay in Cochin Airport until 2022.

Later, the Federal Bank approached the National Company Law Tribunal, Chennai, to attach the seaplane under Insolvency and Bankruptcy Code and attached the aircraft in 2022. A U.S.-based buyer purchased it at an auction for just ₹3 crore. The defunct aircraft was then shipped to the U.S. by the buyer after dismantling it. By the time, the loss of the company had mounted to around ₹25 crore, said Captain Sudheesh George, who is a seaplane consultant in Kochi now.

Though the situation has changed recently after the Civil Aviation Ministry simplified the norms for the operations of the seaplanes, and Kerala changed its stance on the project, Mr. George has no plans to invest in the project for the time being. He says commercial operation of seaplanes is not viable without government subsidies. Further, it will be difficult for small players to compete with giants like SpiceJet, which recently announced plans to restart seaplane operations by 2025. Finally, the changing political dispensations and their policies, along with the protest by greens and fishermen, make things unpredictable in Kerala, he says.