In May, it is announced that the company will sell four of its five F.27-500s for $16 million and borrow money to purchase modern Boeing or Airbus jetliners.
Consideration is given to the acquisition of fellow-independent Archana Airways, Ltd. as well as struggling Modiluft. The Indian Securities and Exchange Commission investigates the carrier’s dramatic takeover of Damania Airways, Ltd.
Instead, executives, faced with a severe cash crunch and unavailability of new aircraft, elect to emphasize Skyline NEPC, Ltd. and close the doors of this carrier, planning to merge its assets into Skyline at the end of the year. The fiscal situation is, however, worse than originally imagined. NEPC Group does not have the funds to make its aircraft lease payments, pay its pilots salaries, or undertake maintenance checks. Both airlines stop flying during the first week of July.
At the end of July, the company is able to cobble together a significant loan from several financial institutions. In early August, the decision to close NEPC is reversed. Both companies are now downsized and restructured, with the staff reduced in strength from 2,700 to 2000. Salaries are also cut.
On September 15, NEPC is reborn. Flight operations, in South India, employing the five Fokkers that have not been sold, are restarted on October 1. Meanwhile, Skyline NEPC, Ltd. flies the trunk routes.
Service continues in 1998. In 1999, however, NEPC Airlines is merged into Skyline NEPC, Ltd.
World History
