Air Indus doomed to crash before take-off

Company is not owned by the president’s sister, and has yet to be granted licences.

KARACHI:

Located on a narrow street dotted with auto repair workshops in DHA’s commercial area, the inconspicuous head office of Air Indus looks abandoned from the outside.

Incorporated on September 9, 2009, as an air transport company, Air Indus became controversial soon afterwards with rumours flying around that it was owned by Faryal Talpur, a member of the National Assembly and President Asif Ali Zardari’s sister. These rumours were so persistent that after denying the charge during a TV interview in January, President Zardari ordered the defence minister – whose ministry controls the Civil Aviation Authority which regulates the country’s aviation industry – to cancel the operating licence of the company.

Subsequently, Air Indus approached the Sindh High Court (SHC) against the possible cancellation of its licence. The SHC directed the defence ministry in August to complete the process of licence issuance to Air Indus within two months.

Who owns the airline?

According to its official website, Air Indus is “backed by a Group of Companies that have (sic) an established reputation in the engineering, automotive and hospitality sectors.” However, the website offers no further information about the company’s owners, directors or management team.

Moreover, the website does not mention where the company is located. No office address, telephone number or fax number is given on the website either. The airline does not even have an email address. Instead, the website shows a PO box number on its “Contact us” and “Careers” pages.

So who owns Air Indus and why it has yet to start operations even after three years of incorporation?

According to classified financial documents of the company – which were reviewed by The Express Tribune – Air Indus is jointly owned by two men, Abdul Wahid and Abdul Wahab, who also serve as the company’s directors. Each of them has a 50% stake in the company, whose total paid-up capital is Rs100 million.

The Express Tribune made repeated attempts to contact Air Indus CEO Abdul Wahab – but to no avail. Company Secretary Syed Kassim Raza, who spoke to The Express Tribune briefly and reluctantly – said Air Indus had nothing to do with Talpur. As for why the company was still not able to operate flights even after three years of its inception, Raza said he was not authorised to comment.



In dire straits

Although the company secretary refused to state reasons for the delay in the commencement of flights, Air Indus’ most recent directors’ report, dated October 5, blames it on the ministry of defence.

“This is due to the fact that the company has not yet been able (to) resume its commercial operation on account of non-receipt of Aircraft Purchase Permission from the Ministry of Defence/CAA and withholding of renewal of our Regular Public Transport (RPT) licence since March 2012,” the report said.

However, the Air Indus website says otherwise. “Air Indus is pleased to announce induction of Boeing 737 aircraft into the fleet. All these aircraft have an ultra-modern cabin and are designed for total passenger comfort,” the website claims, without stating the precise number of aircraft inducted into the airline’s fleet.

A CAA spokesman said the request for the aircraft purchase permission was currently under process and would only be granted after due diligence.

According to the annual report of Air Indus, the company has accumulated financial losses of Rs114.3 million in the last three years. In the last fiscal year alone, its losses were Rs103.3 million.

Further alarm is raised in the auditor’s report, which cast doubt on the company’s future prospects. “In view of the prevailing conditions, there is significant doubt about the company’s ability to continue as a going concern,” said auditors Abbas Karjatwalla and Company in their report.

Apparently, the regulator’s reluctance for the last three years to grant the requested approvals indicates that the ruling party has little to do with Air Indus. But why the company management has chosen not to speak to the media while suffering heavy financial losses in silence remains unclear.

Published in The Express Tribune, November 25^th, 2012.