Chief minister Manohar Joshi told The Financial Express that his government was committed to allowing feeder route operators to conduct services in the state and would find a new airline after the monsoons. "We will provide air services connecting Mumbai to important industrial and tourist townships."

Joshi said Span Aviation (I), which has joined hands with the State Industrial and Investment Corporation of Maharashtra (Sicom) and others to form Span Aviation Maharashtra, has failed to operate on the Mumbai-Kolhapaur and Mumbai-Nashik sectors. Services launched last year were terminated. "I am unhappy with Span Aviation's performance, and hence the decision to scrap links with it," Joshi said.

Sicom has provided term loans worth Rs 2 crore in Span Aviation Maharashtra with a total equity of Rs8.50 crore launched last year. Span Aviation (I) promoted by Prabin Guptey and his associates hold 48 per cent equity (Rs 3.50 crore).

The Pune-based Avinash Wardekar has picked up 26 per cent in Span Aviation Maharashtra. Wardekar, who was to contribute Rs 2.50 crore towards 26 per cent equity, has so far contributed only Rs 1.40 crore and has already backed out without making a contribution of the balance Rs 1.10 crore.

Incidentally, Wardekar has demanded that a new promoter should be looked for and purchase his shares worth Rs 1.50 crore and the balance Rs 1.10 crore. However, both Span Aviation and Sicom have failed to search a new promoter.

On top of it, Span Aviation which had sourced in four Beechcraft Super Kingair B-200, the 13-seater aircraft on lease from the US-based Raytheon, had to return it as the aircrfat were not upto the required standards. Raytheon had supplied the aircraft without a deregistration certificate as the company had given over specifications and failed to provide assuredspare part support.

Span Aviation approached the US court against Raytheon and demanded compensation but reached an out-of-court settlement. On the basis of this agreement, Raytheon waived off the six month lease rental and paid a certain sum to the Span Aviation. Span, which was to fly at least three aircraft, cannot fly more than one and thus ultimately returned all four aircraft to Raytheon.

In the meanwhile, Span Aviation sourced a 19-seater 407 model Czechoslavakian from Archana Airways to operate on Mumbai-Kolhapur and Mumbai-Nashik sectors. The aircraft brought in had a C check of a mere 100 days and ultimately had to be sent for such checks which brought the operations to a grinding halt.

Archana Airways, whose aircraft crashed in Himachal Pradesh recently, had promised to provide in all five aircraft (two by November and three by December) on lease. The Czechoslavkian company had assured spare part support for one year and an appointment of an engineer to supervise operations. However, with thelone aircraft which was hired by Span Aviation going for checks, operations came to a halt.

Span Aviation, which was operating on its own with a fleet of two Cessna F 406 aircraft since 1995, had a turnover of Rs 25.5 lakh in 1994-95. During 1995-96, it touched Rs 3 crore and the company expected to reach a turnover of Rs 5 crore in 1996-97. Interestingly, Span Aviation had expected a turnover of Rs 30 crore in 1997-98. However, it had failed to do so.