Al Hind Air's Commercial Launch Delayed by Aircraft Acquisition and Funding Challenges

Al Hind Air's anticipated entry into India's aviation sector is experiencing significant delays despite receiving regulatory approval from the Ministry of Civil Aviation in December 2025. The airline, which obtained its no-objection certificate (NOC), is now struggling to advance to the next regulatory phase due to persistent challenges in aircraft acquisition and financing arrangements.

Aircraft Acquisition Strategy

The airline has been actively searching for aircraft over several months, with plans to commence operations using three ATR 72 turboprop aircraft before scaling up to a seven-aircraft fleet. Al Hind Air has focused on acquiring pre-owned ATR aircraft that are four to five years old, a strategic approach designed to reduce acquisition costs compared to purchasing new aircraft.

Funding Challenges Override Supply Concerns

While some within the airline have identified aircraft availability as a potential bottleneck, industry executives indicate that supply constraints are not the primary issue. Pre-owned ATR aircraft remain available in the global market, with other Indian regional carriers successfully inducting similar aircraft. The more significant challenge appears to be securing adequate funding for aircraft acquisition.

Al Hind Air's preference for outright aircraft purchases rather than leasing arrangements has complicated its financing efforts. Although leasing typically requires lower upfront capital and represents the preferred route for new airlines, the company favors direct ownership to minimize long-term operating costs.

Financing Roadblocks

The airline's financing difficulties have become more pronounced as ownership requires substantial upfront funding and demonstrated lender confidence. While aircraft purchases were initially expected to be funded primarily by the company, efforts to attract external investors have not yet resulted in firm commitments.

Al Hind Air engaged Martin Consulting to advise on acquiring two ATR aircraft. However, financing discussions reportedly reached an impasse when the parent group declined to provide hard collateral, which is typically required for aircraft purchase financing. Martin Consulting has declined to comment on the matter, citing ongoing arbitration.

Operational Impact

The extended delays between Al Hind Air's original launch timeline and the eventual NOC issuance have increased the company's holding costs. To preserve cash flow, the airline has placed the majority of its employees on unpaid leave. Without confirmed aircraft contracts, Al Hind Air cannot proceed with its application for an air operator's certificate (AOC), which represents the final regulatory approval required for commercial operations.

Future Operations Plan

Once operational challenges are resolved, Al Hind Air plans to establish its operational base in Kochi, connecting the city with destinations throughout southern India. The airline intends to operate select routes under the government's UDAN programme, which aims to enhance regional connectivity.

Industry Context

Following operational disruptions and public criticism after an IndiGo incident in December 2025, civil aviation minister Ram Mohan Naidu publicly advocated for increased airline competition to reduce dependence on a limited number of carriers. Al Hind Air's current struggles highlight a persistent challenge in Indian aviation: while regulatory approval processes may be accelerating, access to capital and aircraft financing remains a substantial barrier, particularly for new regional-focused airlines.