Outlining the five-year plan, Ajmal Khan, who will soon takeover as chairman of the company, said Royal Airways is ready to give a tough competition to the existing players in the industry. As a private airline, initially the main competition will be with the other private carriers in the field, said Khan.

Khan, a non-resident Indian from Canada, is the main financial source for the relaunch. He will control around 20 per cent of the company's enhanced equity of Rs 138 crore from the present level of Rs 64 crore.

Royal Airways will launch the operations with the two Boeing 737-400 to be procured on dry lease. By June 2000, three more aircraft will be added to the fleet. The fleet size will be increased to 12 in two years. In addition to the metroes the company will also operate in non-trunk routes, Khan said.

Khan, who has a diversified business interests overseas, is president of Royal Holding Services Ltd (RHSL), a newly set up investment company in the US. RHSL will invest around &17.5 million in the ModiLuft through preferential allotment.

On its business strategy, Khan said the airline will have the main thrust on quality service. ``With support of British Airways and Speedwing, a wholly-owned subsidiary of BA, we will be able to provide an international standard service,'' he said.

Speedwing, a consultancy firm specialising in aviation sector restructuring strategy, has prepared a business plan for ModiLuft. The company is also providing professionals to hold all key positions in the company.

According to Khan, there is a huge growth potential in the domestic aviation industry. On his entry in the industry through the defunct ModiLuft, he said it was easy to takeover the existing company in view of the long procedure required to enter the market.

The company will soon launch an image building exercise. It has already taken the first step in this direction by changing the brand name from ModiLuft to Royal Airways. The Company will formally apply for this shortly, he said.

The company will be managed by professionals not promotors, Khan pointed out.

Dwelling on the present state offairs in the aviation sector, Khan said it a highly specialised capital-intensive sector and the profit margins are thin ``The competition is tough and only serious playears with good financial backing can survive,'' Khan said.