Kingfisher Airline to Resume Operations in a Phased Manner

Sunday, 30th December 2012 at 13:29pm

Bangalore-based Kingfisher Airlines revealed last week its plan to resume operations in phases after being suspended last October due to its employees' strike over unpaid salaries.

The airline is also facing eviction from Mumbai airport due to its failure to pay the parking and navigation fees. Its license, which is temporarily suspended, will be reinstated once the airline formulates a feasible revival plan.

To follow on Kingfisher's plans, a six-member core group including the government-run State Bank of India has been organized by the airline's lender, according to Shyamal Acharya, a senior executive of the said bank.

Prakash Mirpuri, the spokesperson for Kingfisher, added that the airline will provide funding for itself and will resume operations in a "phased manner". No time frame was specified, though.

The Press Trust of India reported that according to Acharya, airline owner Vijay Mallya is willing to dole out 4.25 billion rupees, or $78 million, to have the airline operating again.

Mirpuri also claimed that the company has a full recapitalization plan that needs further discussion with a small group of bankers.

Kingfisher Airlines have not asked any bank for support, but they are instead discussing with a number of investors including the Etihad Airways of Abu Dhabi.

However, analysts were in doubt regarding whether or not Etihad will be willing to invest in Kingfisher, given that the debt of the later have reached approximately $2.5 billion, according to CAPA, or the Centre for Asia Pacific Aviation.

Besides self-funding operation, full recapitalization plan, and equity investments in the company to save Kingfisher from permanent shutdown, Mallya has also been searching for a foreign airline to purchase shares in his airline. Last September, the government has allowed overseas carriers to procure up to 49 percent in local carriers.

By: Pete Lee.