Royal Airways, the fourth private scheduled airline, is all set to start operations in April-June 2004.

To bring in aircraft and also for marketing and advertising exercises, the majority stake holder Royal Holding Services Ltd will make investments of $17.5 million.

According to company executives the airlines will begin operations on trunk routes with five leased Boeing 737s.

In the second year of operations the airline plans to induct three to six aircraft in a phased manner. The $17.5 million is part of the second tranche of investments of the $35 million approve by the Foreign Investment Promotion Board in 2000.

The decision to begin operations has come after the customs department agreed to issue a no objection certificate.

The NOC will be issued after the airline has paid the first installment of the Rs 6.10 crore (Rs 61 million) of Inland Air Traffic Tax dues.

In accordance with the agreement with the customs department Royal Airways will pay the dues through five monthly installments.

The airlines plans to pay the first installment within next week post which the customs department will issue the NOC, company sources said.

Sources said that the airline is currently firming up its marketing strategies for the launch next year.

Though company executives did not divulge details, the airline plans to cover a combination of major business and tourist routes by next year-end.

The airline is also likely to match the competitive fares that have been launched in the market by Indian Airlines, Jet Airways and Air Sahara.

Company executives said that the airlines has paid off the liabilities of the erstwhile Modiluft. Royal Airways has paid the Rs 25 crore (Rs 250 million) oil dues of Indian Oil Corporation, BPCL and HPCL and the Rs 1.24 crore (Rs 12.4 million) of Airports Authority of India.

The ministry of civil aviation had issued an NOC to the company in 2000 which had been contested by the customs department due to the IATT dues.