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KFH-2004-07 START UP
KFH-2004-10 NEW START
KFH-2008-10-A340-500 TO AKI
KFH-FLT CREW JOBS-2005-04
KFH-VISIT TAJ MAHAL
Formed in 2004 and started operations in 2005. Member of the United Breweries (UB) Group. Regional, scheduled & charter, passenger & cargo, jet airplane services.
F-44A South Extension Part 1
New Delhi 110049, India
Hangar 6A, Juhu Airport
S. V. Road, Vile Parle (W)
Mumbai 400054, India
G 5-A, Kilfire House, Ground Floor
Dalia Industrial Estate, Near Fun Republic
Andheri New Link Road, Andheri (W)
Mumbai 400 053, India
INDIA (REPUBLIC OF INDIA) WAS ESTABLISHED IN 1947, IT COVERS AN AREA OF 3,287,590 SQ KM, ITS POPULATION IS 970 MILLION, ITS CAPITAL CITY IS NEW DELHI, AND ITS OFFICIAL LANGUAGES ARE HINDI AND ENGLISH.
July 2004: Farnborough Show announcement of (MOU) for 4/8 orders A320's by UB Group who intend to launch a low-fare airline called Kingfisher Airlines. Kingfisher is the name of UB's beer brand. Also negotiating with lessors for 4 other A320's for delivery in (1/05) for start up.
October 2004: Plans to launch operations in April.
Initial markets to be served include Mumbai, Delhi, Kolkatta, Chennai, Bangalore, Hyderabad, Guwahati, Imphal, Goa, Ahmedabad, Indore, Mangalore, Calicut, & Trivandrum.
(FAX: +91 22 2673 0359). (http://www.flykingfisher.com).
November 2004: 4 orders (3/05) A320-232's (V2527-A5), Debis AirFinance (DEA) leased.
December 2004: Parent United Breweries (UB) has had a 37.5% stake acquired by UK brewer Scottish & Newcastle. Dr Vijay Mallya, Chairman retains 37.5%.
$1.8B, 10/20 orders (9/05) A320's, maintenance by Indian Airlines (IND). Plans to have a fleet of 8 A320's by end of 2005, 16 by end of 2006, and 37 by 2008.
February 2005: 3 orders A319-132's (V2500), 144Y. Intends to base its A319's at Bangalore and its A320'S at Mumbai.
April 2005: 1st A319 & A320 deliveries.
May 2005: Received its Air Operator Certificate (AOC) and started operations.
A320-232 (2443, VT-KFB), Debis AirFinance (DEA) leased.
June 2005: $3B, 5 orders (7/07) A330-200's, 5 orders (2012) A350-800's & 5 orders (2010) A380-800'S. The A330-200's will be deployed domestically in single-class layout, and on regional and European routes, whereas the A350's & A380's will be operated in two- or three-class configuration on longer nonstop flights, including to the USA.
July 2005: A320-232 (2496, VT-KFC), (DEA) leased delivery.
August 2005: 2 orders (9/05) A320's (V2500), Babcock & Brown (BBB) leased. A320-232 (2502, VT-KFD), Debis AirFinance (DEA) leased.
September 2005: A320-232's (2522, VT-KFE; 2531, VT-KFF), deliveries.
October 2005: Airbus (EDS) received formal approval from its shareholders, (EADS) and BAE Systems, yesterday for industrial launch of the A350 on the basis of 140 "firm order commitments" from nine customers, one of which is unidentified. In Washington, Airbus (EDS) COO, Charles Champion said the company is "confident" it will reach 200 commitments by year end, while Executive VP Procurement, Henri Courpron said that all 200 will be firmed within the same timeframe.
As previously announced, the airplane will be offered in two versions, the A350-800 seating 258 in a three-class configuration with a range of 8,800 nm and the A350-900 seating 316 with a range of 7,500 nm. The A350-800 will enter service in mid-2010 while the larger A350-900 arrives later in the year.
The A350-800 airframe will launch with a version of the (GEnx) engine. To date, (GE) has captured all firm orders from identified customers, a total of 130 shipsets, plus 32 options.
The current customer list comprises Air Europa (ARE) (10), ALAFCO (12), CIT (TCI) (5), GECAS (GEF) (10), Kingfisher Airlines (KFH) (5), Qatar Airways (QTA) (60), TAM (TPR) (8), US Airways (USA) (20) and an unidentified customer (10).
A320-232 (2576, VT-KFG), delivery.
November 2005: Kingfisher Airlines (KFH) will inaugurate nonstop service from Bangalore to Goa. The airline will operate a daily flight using the A320.
Kingfisher Airlines (KFH) made a bid to take over 100% of Air Sahara (SAQ), parent company UB Group head Dr Vijay Mallya revealed, according to media reports. Mallya said the offer was lower than the $750 million - $1 billion Ernst and Young said Air Sahara (SAQ) was worth. In addition, he told reporters that UB Group plans to raise $400 million, half of which will come through an Initial Public Offering (IPO) for Kingfisher (KFH).
Kingfisher Airlines (KFH) appears set to place a $2 billion Airbus order at this week's Dubai Air Show. The six-month-old carrier is likely to order 30 A320s and 20 ATR turboprops, according to media reports and at least two company executives, who confirmed the order to reporters. The startup placed a $3 billion order consisting of five A380-800s, five A350-800s and five A330-200s at the Paris Air Show last summer.
Airbus (EDS) bounced back after Boeing (TBC)'s domination of the Dubai Air Show's first day, as "air show showman" Dr Vijay Mallya, Chairman of UB Group and its Kingfisher Airlines (KFH), confirmed the carrier's order for 30 more A320 family airplanes. Deliveries of the airplanes, which will comprise a mix of A319s and A320s, are due to begin in early 2008. Kingfisher (KFH) already flies seven A320s and has three A319s due for delivery by December. Like the existing fleet, the new airplanes will be powered by International Aero Engines (IAE) (V2500)s. The airline's deal with (IAE) is valued at more than $500 million, according to the engine maker.
Mallya was lyrical about the A320. "We have had a wonderful start to our Airbus A320 services within India. Our guests love the airplanes and are delighted with what we offer, which is an attractive and unique travel experience at an affordable price." In the six months since Kingfisher (KFH) launched services, it has snared 6% of the Indian market.
The airline also announced an order at the show for 20 70-seat ATR72-500s with options on 15. The contract value was given as $350 million. The ATRs will be used on feeder services to Kingfisher (KFH)'s four hubs of Delhi, Mumbai, Kolkata and Bangalore.
December 2005: 2 A319-131's (2621, VT-KFH; 2634, VT-KFI), deliveries.
January 2006: Jet Airways (JPL) is close to a deal to acquire Air Sahara (SAQ) or to enter into a marketing alliance, according to media reports in India. Previously, Kingfisher Airlines (KFH) reportedly bid to take over 100% of Air Sahara (SAQ). (SAQ) earlier said that financial advisers Ernst and Young valued it at between $750 million and $1 billion.
Kingfisher Airlines (KFH) will launch daily Mumbai - Mangalore service on January 20th.
A319-132 (2664, VT-KFJ), SALE (SIL) leased. A319-133X (2650, VT-VJM), delivery.
February 2006: Kingfisher Airlines (kfh) inaugurated nonstop service from Delhi to Pune. The airline will operate 2 flights a day.
Kingfisher Airlines (KFH) firmed options for 15 ATR72-500s, part of an order signed in December that included 20 firm airplanes. It also took 20 new options. Deliveries will begin in 2007. The ATRs will be used on smaller domestic routes to link Kingfisher (KFH) hubs in Delhi, Bombay, Calcutta and Bangalore.
A320-232 (2670, VT-KFK), Babcock (BBB) leased.
March 2006: Kingfisher Airlines (KFH) signed a deal with Galileo to make its fares and inventory available on the (GDS).
Kingfisher Airlines (KFH) leased 2 new A320-200s (V2527-A5) from ILFC (International Lease Finance Corporation) (ILF) for 9 years. The airplanes are scheduled to be delivered in April 2007. The airline also leased a new A321-200 (V2533-A5) for 9 years to be delivered in May 2007.
1st ATR72-500 (699, VT-KAA), delivery. The first two will connect Bangalore with Hyderabad, Mangalore and Chennai, with Bangalore being the hub for South India. In the 2nd phase, Guwahati will be the hub for East India, while Jaipur will serve as the hub for ATR operations in North India.
April 2006: Kingfisher Airlines (KFH) is an Indian budget airline operating a growing domestic nework. It plans to expand into regional and long-haul jet airplane services.
(IATA) Code: IT.
Parent organization/shareholders: United Breweries (UB) Group (62.5%); & Scottish & Newcastle Breweries, UK (37.5%).
(Telephone: +91 22 55 03 10 91). (FAX: +91 22 55 03 10 95).
Main Base: Mumbai/Bombay International (BOM); & Delhi Indira Gandhi International (DEL).
Hub: Ahmedabad (AMD).
Domestic scheduled destinations: Agartala; Ahmedabad; Bangalore; Chennai; Delhi; Dibrugarh; Goa; Guwahati; Hyderabad; Kochi; Kolkata; Mumbai; & Pune.
Kingfisher Airlines (KFH) signed an order for five A340-500s with options for five more. The Rolls-Royce (Trent 553)-powered airplanes are scheduled for delivery in 2008. Kingfisher (KFH) currently operates eight A320s and four A319s and has placed firm orders for five each of the A380, A330 and A350. Dr Vijay Mallya, Chairman of Kingfisher parent UB Group, said the new airplanes will allow the Indian airline to launch direct flights to the USA for the first time.
May 2006: Indian startup Kingfisher Airlines (KFH) has been a marketing success since launching in May 2005, but the growing pains are evident in the carrier's bottom line, which was -INR1.9 billion/-$41.8 million in the red after one year of operations, it told "The Hindu"'s Business Line. Kingfisher (KFH) now holds a 9% market share and has earned revenues of INR7 billion so far. It celebrated its one-year anniversary earlier this month, with a series of onboard ceremonies, including addresses from Chairman & CEO, Dr Vijay Mallya. "We have come a very long way, and all of this would not have been possible without the overwhelming response that all of you have shown," Mallya said aboard one flight. "Our understanding of the emerging new India set us on the path to create a product and service offering designed to truly wow and delight air travelers."
The carrier was saddled with heavy startup costs, as it launched with all-new airplanes, In-Flight Entertainment (IFE) at every seat, and some first class service on domestic routes. It operates 70 flights per day to 15 Indian destinations with a fleet of eight A320s, three A319s and two ATR72-500s.
Kingfisher (KFH) said it is targeting a 15% market share in the next year and expects a turnover of INR10 billion. It plans to start long-haul services when its first widebody airplanes arrive in 2007. It has five A380s, five A330s and five A350s on order and last month placed a five firm, five option A340-500 order, that will begin delivery in 2008 and be used on flights to the USA. It will take delivery of 10 airplanes this year and operate 69 by 2010.
"The Hindu" reported that the airline plans to raise approximately $200 million starting next month through Foreign Currency Convertible Bonds, private placement or an Initial Public Offering (IPO). It also is planning its own cargo service, dubbed "King Cargo," that may involve the purchase of dedicated freighters.
Kingfisher (KFH) signed a participating carrier agreement with Worldspan, the Global Distribution System (GDS) announced, making its schedules, availability and fares available to worldwide points of sale and providing it with Worldspan AccessPlus technology.
Indian domestic airports recorded a near +10% increase in cargo traffic in the 12 months to March 31 over the previous corresponding period. The biggest increases were recorded at Tiruchi (up +114.8%), Patna (up +37.2%), Bangalore (up +23.6%), Delhi (up +11.2%) and Chennai (up +10.8%). International freight traffic also grew strongly, rising +11.7% to 920,150 tonnes. The biggest gains were recorded at Tiruchi (+130%), Coimbatore (+102%), Bangalore (+27.3%) and Hyderabad (+21.7%).
June 2006: Kingfisher Airlines (KFH) inaugurated nonstop service from Bangalore to Mangalore as well as from Chennai to Mangalore. The airline operates daily flights on both routes using an ATR72-500.
July 2006: Kingfisher Airlines (KFH) started daily Ahmedabad -Mumbai, Hyderabad - Chennai, Hyderabad - Vishakhapatnam, Chennai -Vishakhapatnam and Chennai - Kochi flights aboard ATR72s. It now operates 86 daily flights to 17 destinations.
Pratt & Whitney (P&W) said Kingfisher Airlines (KFH) will be the first customer for the (PW4000) Advantage 70 upgrade developed for the (PW4168A) powering the A330. The Advantage70 package is set for certification in 2008.
Kingfisher Airlines (KFH) chose Pratt & Whitney (PW4168A)s to power its A330 fleet. The deal includes 10 installed engines, one spare and an option for an additional 10. Pratt also was awarded a long-term exclusive fleet management program to overhaul and repair Kingfisher (KFH)'s (PW4168A)s. Pratt valued the total transaction at $300 million, plus an additional $200 million if all options are exercised.
Pratt & Whitney Canada (PWC) signed an exclusive five-year agreement with Kingfisher (KFH) to maintain engines for its new fleet of 35 ATR 72-500s. The contract is valued at approximately $60 million. Under the agreement, (PWC) will provide engine maintenance and accessory coverage for Kingfisher (KFH)'s 70 (PW127F)s, along with seven spare engines.
A320-232 (2817, VT-KFL) and ATR72-212A (723, VT-DKE), deliveries.
August 2006: The Centre for Asia Pacific Aviation said the Low Cost Carrier (LCC) market share in India is expected to reach 70% by 2010, as full-service airlines lose 1.5 points every month. "We do not expect this rate to slow in the short term, given the profile of current fleet orders. (LCC)s could therefore control over 35% of the domestic market by the end of 2006 and pass 50% some time in [the second half of 2007]," CAPA CEO, Indian Subcontinent and Middle East, Kapil Kaul said, adding that 60 million passengers are expected to fly on Indian carriers in 2010.
A320-232 (2856, VT-KFM), delivery.
September 2006: Kingfisher Airlines (KFH) inaugurated daily services connecting Jaipur to Hyderabad via Mumbai and also launched 2 direct flights connecting Mumbai to Hyderabad using A320s.
Kingfisher (KFH) inaugurated nonstop service from Mumbai to Mangalore. The airline now operates a daily flight using an A319.
October 2006: India's Kingfisher Airlines (KFH) reportedly was told that its five A380s will not be delivered until 2011 and Airbus has agreed to pay the carrier $22 million in compensation in either cash or discounts. Kingfisher (KFH) also has five A330s and five A350s on firm order.
2 A321-231's (2916, VT-KFN; 2919, VT-KFP), deliveries.
November 2006: Kingfisher Airlines (KFH) posted a -INR1.07 billion/- $23.9 million loss for the first six months of its fiscal year ended September 30, The Economic Times reported. CEO, Dr Vijay Mallya said Indian Low Cost Carriers (LCC)s are undercutting the market by offering low fares from which even the (LCC)s cannot earn profits. He has complained formally to India's Directorate General of Civil Aviation, writing in a letter to the agency, that the fares are "not sustainable" and that "cash losses will only keep mounting."
The "Federation of Indian Airlines" is the name of the new industry body created by scheduled passenger carriers in India, according to press reports. Initial members are Air Deccan (DCC), Air-India (AIN), Air Sahara (SAQ), GoAir (GOZ), Indian Airlines (IND), IndiGo (IGO), Jet Airways (JPL), Kingfisher Airlines (KFH), Paramount Airways (PAT), and SpiceJet (ROJ). The group will cooperate in areas such as human resources, maintenance and ground handling, as well as lobbying issues.
Kingfisher Airlines (KFH) and Pratt & Whitney (P&W) signed a $300 million agreement covering 10 (PW4168-100) engines to power the carrier's five ordered A330s as well as one spare engine, 10 options and an exclusive overhaul and repair program.
The deal, first announced at Farnborough, will be worth $500 million if all options are exercised. The USA Department of Commerce hosted the signing to highlight the growing trade relationship between the USA and India and several dignitaries, including (FAA) Administrator Marion Blakey, were on hand.
"I bought the Airbus (EDS) airplanes, but as a result of USA engines, the European airplane is now more than 50% American," Kingfisher (KFH)Chairman & CEO, Dr Vijay Mallya said, noting that a "very detailed analysis" led the 18-month old airline to choose the (P&W) powerplants.
He emphasized the importance of the USA to Kingfisher's long-term plans. "I have been witnessing the huge growth in Indo-USA trade and it's one reason why I've said since our launch, 'Let's forget the rest of the world and connect India to the USA nonstop.'" Kingfisher (KFH) does not operate USA flights, but has said it intends to in the future.
(P&W) President, Steve Finger said the "strength" of his company's relationship with Kingfisher (KFH) "is apparent and it's not just for this order."
The carrier will operate 160 daily flights with a fleet of 23 airplanes to 21 destinations at the height of its upcoming winter schedule. It entered into an interline agreement with Delta Air Lines (DAL), under which passengers on (DAL)'s recently launched New York (JFK) - Mumbai flights will be able to connect to domestic Kingfisher (KFH) flights.
2 A321-231s (2927, VT-KFH; 2933, VT-KFR), deliveries.
December 2006: Kingfisher Airlines (KFH) took delivery of four (IAE)-powered A321s. It currently operates 10 A320s and three A319s and will be the first Indian carrier to operate the A321.
2 ATR72-212As (737, VT-KAE; 738, VT-KAF), deliveries.
January 2007: ATR delivered an ATR72-500 equipped with InFlight Entertainment (IFE) to Kingfisher Airlines (KFH). The (IFE) equipment, provided by Vision Systems of France, features 17 drop-down (LCD) screens.
February 2007: Kingfisher Airlines (KFH) partnered with dishtv of India to offer live television and digital entertainment in flight. The first airplane was equipped with the service, called Live, in December. It features 21 channels of television and video content, 10 of music and a map channel.
Has achieved an 8.3% domestic market share with 130 daily flights to 23 domestic destinations.
March 2007: The India Ministry of Civil Aviation granted approval to Alliance Air (ALX), Jet Airways (JPL), Deccan Aviation (DCC), Sahara Airlines (SAQ), Kingfisher Airlines (KFH), Paramount Airways (PAT), and Indus Airways (IDU) to acquire and operate foreign manufactured airplanes with fewer than 80 seats. Airlines in India are exempt from landing fees for planes with fewer than 80 seats.
The ministry announced that the new Bangalore International Airport will open April 2.
Airlogica will provide its Zeus GDS cost-monitoring software to Kingfisher Airlines (KFH).
A321-232 (3034, VT-KFS), & ATR72-212A (743, VT-KAG), deliveries.
April 2007: Kingfisher Airlines (KFH) launched a Bangalore - Tiruchirapally service. Kingfisher Airlines (KFH) launched Kochi - Agatti service.
INCDT: At least three Airbus airplanes suffered damage in a fire at Middle East overhaul firm Gulf Aircraft Maintenance (Gamco) (GUL), which started in an A300 said to belong to Qatar Airways (QTA). Emerging details indicate that the effects of the fire at Gamco (GUL)’s Abu Dhabi facility were more severe than initially indicated, with jets belonging to Kingfisher Airlines (KFH), and Air Mauritius (MAU) confirmed as being affected. Air Mauritius (MAU) had an A319 parked next to the A300. The airline has identified the twin-jet as a four-year old example, owned by the carrier, equipped with CFM International (CFM56) engines. “According to initial information, the tail of the airplane collapsed and parts fell on our airplane,” says an Air Mauritius (MAU) spokesman. “We do not know the extent of the damage, and therefore cannot advise when the airplane will be back in service.” India’s Kingfisher Airlines (KFH) says that it had an A320 in the same hangar awaiting a "C1"-check and installation of in-flight entertainment systems. A spokesman for the carrier says that the International Aero Engines (V2500)-powered twin-jet, which is owned by lessor AerCap (DEA) and is less than two years old, escaped with “little damage,” although it was subjected to “falling debris”. Qatar Airways (QTA) has not confirmed that it is the operator of the A300 at the heart of the investigation, although there are increasing indications that the jet in question is an A300-600R and that the jet has sustained serious damage. Gamco (GUL) General Manager, Saif Al Mughairy said that, despite the fire, the maintenance operation itself should not be badly affected. He is not prepared to disclose details of the fire damage, beyond confirming that it started in an A300 airplane, or the specific customers affected. But he says that the company is otherwise operating “as normal” and that he is “very confident” that main investigation into the incident will be completed within four or five days.
A320-232s (3089, VT-KFT), delivery; (3105, VT-KFU), (ILF) leased, and ATR72-212A (746, VT-KAH), delivery.
May 2007: The Indian government made seat assignments compulsory for all domestic airlines. The Office of the Director General of Civil Aviation said it was imposing the regulation "in order to ensure correct loading of airplanes and keeping the center of gravity of the airplane within limits at all times during flight."
SITA said it is working with Airports Authority of India (AAI) to deploy an additional 17 (VHF) ground stations at the nation's airports, enabling Indian airlines and (AAI) to exchange real-time data with airplanes and allowing "increased safety and efficiency of operations." This will bring SITA's Aircom network in India to 23 stations.
A321-232 (3120, VT-KFV), delivery.
June 2007: The pace of Indian consolidation appears to be ramping up as Kingfisher Airlines (KFH) took a significant step toward acquiring Bangalore rival Air Deccan (DCC) with the purchase of a 26% stake for INR5.46 billion/$133.6 million. The transfer, announced in filings with the Bombay Stock Exchange, includes a promise from Kingfisher (KFH) parent, United Breweries Holdings to make an open offer for a further 20% of Air Deccan (DCC), the country's first low-fare carrier. This deal will make Kingfisher (KFH) "probably . . . the largest airline in terms of market share" in India, Air Deccan (DCC)Chairman & Managing Director G R Gopinath told reporters in Bangalore, adding that there were other bidders. The airline will continue to operate as an independent Low Cost Carrier (LCC).
The deal follows Jet Airways (JPL)'s purchase of Air Sahara (SAQ) and the state-orchestrated merger of Air-India (AIN) and Indian Airlines (IND) as a response to the crippling overcapacity in the domestic market. Kingfisher (KFH) and Air Deccan (DCC) will operate a combined fleet of 71 airplanes to 70 destinations, according to press reports. The Indo Asian News Service reported that Jet (JPL)/Air Sahara (SAQ) led India in 2006 with a combined 40% share, Indian Airlines (IND) held 21.5%, Air Deccan (DCC) 18.3%, and Kingfisher (KFH) 8.7%.
Kingfisher (KFH)'s Vijay Mallya reportedly will become Air Deccan (DCC)'s Vice Chairman, with Gopinath taking the reins as Executive Chairman. The two airlines, which each operate A320 family airplanes and ATRs, will select a new CEO jointly. Air Deccan (DCC) reported a loss of -INR2.13 billion in the 12-month period ended March 31, "AFX News" reported.
Later, Kingfisher Airlines (KFH) revealed a few more details about parent United Breweries Group (UBG)'s acquisition of 26% of Air Deccan (DCC) parent, Deccan Aviation, including that the promised offer to acquire an additional 20% of Deccan (DCC) will be priced at the same INR155/$3.82 per share. The initial stake cost (UBG) INR5.46 billion. (UBG) will be the largest shareholder in Deccan (DCC) and will nominate three directors to the 12-member board. The combined fleet of 71 A320 family and ATR airplanes will operate 537 flights to 69 Indian cities, "whilst taking advantage of unparalleled synergy benefits arising from a common fleet of airplanes," according to Kingfisher (KFH). "For the near future, Kingfisher (KFH) will continue to serve the corporate and business travel segment, while Air Deccan (DCC) will focus on serving the low-fare segment, but with improved financial prospects for both carriers," Kingfisher (KFH) said. Speaking to reporters, UB Group head Vijay Mallya said there were no plans to launch an Initial Public Offering (IPO) "at this stage" and that (UBG) would have no problem funding the acquisition.
While shoring up its domestic presence with its pending acquisition of Air Deccan (DCC), Kingfisher Airlines (KFH) has big long-haul plans as well, including a possible alliance tie-up, Chairman & CEO, Vijay Mallya said at the (IATA) (IAT) Annual General Meeting (AGM) in Vancouver. "The delivery of our long-haul fleet of five A340-500s will be starting in February 2008," he said, which will lead to the launch of daily nonstop flights from Bangalore to San Francisco in April, and New York (JFK) in June. "Our [A340-500] will have a very luxurious configuration and thoroughly spectacular service, including a bar for our economy class passengers," he said.
Kingfisher (KFH) will add to its long-haul fleet with an order for five A340-600s that will be announced at this month's Paris Air Show. "We need more widebody airplanes for 2009 to 2010, because of the late delivery of our A380s," Mallya explained. The carrier has A330s, A350s and five A380s on order. The latter are expected to operate daily flights from Mumbai and Delhi to (JFK) starting in 2011.
Kingfisher (KFH) parent, United Breweries Group announced the acquisition of 26% of Bangalore-based Low Cost Carrier (LCC) Air Deccan (DCC) parent Deccan Aviation, plus the promise to purchase an additional 20%. With a combined 71 airplanes and a 33% market share, Mallya said the airlines will carry 17.9 million passengers this year and dominate the Indian market along with the merged Jet Airways (JPL)/Air Sahara (SAQ), and Air India/Indian Airlines. "The three carriers are controlling 80% of the Indian aviation market now," he said.
Regarding the three major alliances' effort to establish a foothold in India, he said that each already has invited Kingfisher (KFH) to join. He refused to offer further details, but said he expects the airline to post an operating profit in Fiscal Year (FY) 2008, and be in position to report a net profit the following year.
VGS Aircraft Holding (Ireland) Ltd acquired an A320-200 from RBS Aerospace through wholly owned VGS subsidiary Johannesburg Ltd. The airplane is leased to Kingfisher Airlines (KFH) until September 2012 and financed by HSH Nordbank AG.
Kingfisher Airlines (KFH) Chairman & CEO, Vijay Mallya said that "the days of discounting and cut-price ticketing are over" in India. "Airfares are going to reflect the actual costs of operation. All of them," he told the Centre for Asia Pacific Aviation's annual Aviation & Tourism Investor Summit in Mumbai. He signaled that fares soon may be rising at (LCC) Air Deccan (DCC), in which Kingfisher (KFH) parent United Breweries Group recently acquired 26%. He said Deccan (DCC) needs an additional INR500/$12.27 per fare to be profitable, which "is not enough to scare most people off the airplane. Once you indulge in air travel, you will not get back onto the train for a 14-hour journey."
Lufthansa (DLH) Technik (LTK) signed Total Engine Support and Total Component Support contracts with Kingfisher Airlines (KFH) covering the Indian carrier's growing A320 fleet. The deal expands on an earlier agreement that covered 17 A320s. Under the accords, Kingfisher (KFH)'s component requirements will be supported by (LTK)'s new Indian subsidiary, One Stop Airline Maintenance Repair & Overhaul (MRO). Engines will be managed on a power-by-the-hour basis with access to spare engines included. The contract also includes (LTk)'s Airframe Related Component services covering (MRO) support for composite materials like inlet cowls and thrust reversers, supported through One Stop Airline (MRO).
At the Paris Air Show, Kingfisher Airlines (KFH) committed to 50 new airplanes, collectively valued at $7 billion, including 15 A350 XWBs.
The 15 A350 orders bring the Indian carrier's total to 20, including five placed for the original design that were reconfirmed. As part of a Memo of Understanding (MOU) and expected to be finalized within 30 days, it also placed orders for 10 A330-200s, five A340-500s, and 20 A320 family airplanes. Kingfisher (KFH) parent UB Group Chairman, Vijay Mallya said the new airplanes are in line with the carrier's strategy to "open new long-haul routes and expand existing ones," including future service to the USA. The A340-500s will be delivered in 2009 and 2010, the A330-200s from 2010 to 2012, the A320s from 2012 to 2014, and the A350s from 2014 to 2018. Mallya said he is comfortable with Airbus (EDS)'s assurances on the design and performance of the A350 XWB.
ATR72-212A (750, VT-KAI), delivery.
July 2007: Continental Airlines (CAL) and Kingfisher Airlines (KFH) announced a partnership under which they will offer loyalty program and lounge reciprocity effective October 1. Codesharing is scheduled to begin by year end. (CAL) operates a daily Newark (EWR) - Delhi service and plans to launch daily (EWR) - Mumbai flights on October 1.
August 2007: ATR72-212A (754, VT-KAJ), delivery.
September 2007: OnAir will provide its Webmail OnAir and Webchat OnAir services to Kingfisher Airlines (KFH) next year, followed by inflight Internet and Mobile OnAir service in 2009, the Airbus (EDS)/SITA joint venture announced. The products initially will be installed on five A330s and five A340s, with plans "in place" to install the system across the entire fleet.
October 2007: Kingfisher Airlines(KFH) appears to have taken a significant step toward winning the right to begin long-haul flights next year, as Indian authorities have proposed that fleet size, rather than the age of the carrier, be the determining factor, "The Economic Times (TET)" reported from Bangalore. Previously, airlines had to operate domestically for five years before applying for overseas rights, and a move to reduce that to three years, met with stiff opposition. Kingfisher (KFH) launched in spring 2005 and hopes to fly long-haul next year. Instead, Civil Aviation Minister, Praful Patel told (TET), "We should go by a threshold, rather than the number of years. For instance, if the fleet size is the threshold, and if an airline has 20 to 30 airplanes, then it should be allowed to fly overseas." He said he expects cabinet approval by year end. Patel told the paper that 70% of international traffic in India is carried by foreign airlines, whereas globally, local carriers average
a 50% share. "India will not meet this mark even after five years. Therefore we need to allow more domestic carriers to fly overseas," he concluded. Kingfisher (KFH) may have a backdoor as well, according to Business Standard. Air Deccan (DCC), 46% of which now is controlled by Kingfisher (KFH) Chairman, Vijay Mallya, received its operating license in January 2003, and will be eligible to fly internationally next year. Once Kingfisher (KFH) acquires a majority stake, it can petition for the right to use that license to operate its own airplanes overseas, the paper reported.
A320-232 (3270), (ILF) leased, delivery.
November 2007: Kingfisher Airlines (KFH) launched daily flights from New Delhi to Jammu, and Lucknow, and a daily Khajuraho - Varanasi service. Lucknow and Khajuraho are new destinations, and raise the number of cities served by Kingfisher (KFH) to 37.
A321-232 (3302, VT-KFY), (ILF) leased, A321-232 (3322, VT-KFZ), and ATR72-212A (762, VT-KAM), deliveries.
December 2007: Kingfisher Airlines (KFH), the Indian domestic carrier with plans to become an international player in the next few years (it has 20 A350 XWBs and five A380s on firm order), reported a loss of -INR5.77 billion/-$146.2 million in the fiscal year ended March 31. The result, detailed in the annual report released by parent United Breweries Holdings, is more than double the approximately -INR2.37 billion the carrier lost in 2005 through 2006. The loss is heavier than the -INR4.48 billion suffered by Air-India (AIN) over the same period. According to the annual report, Kingfisher (KFH)'s revenue more than tripled to INR15.53 billion. But Vice Chairman, Subhash Gupte told "The Economic Times" that "the high cost is the main reason for the loss," adding that "airplane acquisition, depreciation, new routes, training requirement and the spiraling cost of aviation fuel in India are the other reasons." The airline currently serves 42 domestic destinations with 37 airplanes.
Kingfisher Airlines (KFH) and Deccan Aviation (DCC) boards have decided to merge the companies, according to widespread press reports from India, paving the way for Kingfisher (KFH) to gain clearance to operate internationally next year. Kingfisher (KFH) parent, UB Group holds 46% of Deccan (DCC) and recently renamed its low-cost airline "Simplifly Deccan," repainting its airplanes in red-and-white Kingfisher (KFH) livery. The two brands will remain after the merger, with Kingfisher (KFH) the full-service carrier. UB CFO, Ravi Nedungadi told "Reuters" that the combined operation will require $250 to $300 million over the next six months, and that a private placement is being considered to raise the funds. The Hindu reported that UB will hold 51% of the new entity. UB head Vijay Mallya, will be Chairman & CEO, with Deccan (DCC) Chairman, G R Gopinath, becoming the merged Kingfisher (KFH)'s Vice Chairman.
ATR72-212As (767, VT-KAN; 772, VT-KAO), deliveries.
January 2008: Kingfisher Airlines (KFH) Chairman & CEO, Vijay Mallya told "Mint" business daily that the airline, likely through its acquisition of Air Deccan (DCC), has "secured all necessary clearances for flying overseas" and that as a result, it will convert its five A380 options to firm orders. Kingfisher (KFH) already has five A380s on order. "We will be operating all nonstop flights to international destinations," Mallya told the paper. "Indo Asian News Service" quoted him as saying that the first long-haul flight will operate August 15 between Bangalore and San Francisco, with service to New York (JFK) launching soon thereafter.
The Indian government relaxed certain industrial foreign investment rules and now will allow foreign investors to hold 100% of Maintenance Repair & Overhaul (MRO) and training organizations, dedicated to civil aviation activities. Foreign direct investment (FDI) in commercial airlines will continue to be capped at 49%, with nonresident Indians allowed to hold 100%, as long as no foreign airlines are participating. (FDI) in ground handling enterprises will be capped at 74%.
February 2008: Deccan Aviation VP Finance, Anand Ramachandran said that the Kingfisher Airlines (KFH)-Air Deccan (DCC) merger likely will be completed in April, following a sale of shares that will raise $300 million to finance immediate expansion needs. "At the present moment, we are in talks to appoint a suitable merchant banker for the share sale by the end of this month," he said at a financial conference in Mumbai. He added that Deccan (DCC) has filed an initial application with regulators seeking permission for the merged airline to fly international routes starting in August, which will mark Air Deccen (DCC)'s fifth anniversary. Private Indian carriers must operate for five years, before legally being allowed to operate internationally.
ATR72-212A (776, VT-KAP), delivery.
February 2008: Honeywell (SGC) will provide the full suite of avionics for Kingfisher Airlines (KFH) A320s, A330s, and A340s as well the 131-9A (APU) for its A320s. Systems include (EGPWS), (ACAS) II, Weather Radar with Forward-Looking Windshear Detection, (FDR) and (CVR), Quantum Line (CNS), (FMS) and (ADIRS). Kingfisher (KFH) also selected high-speed satcom on its A330 and A340 fleets. In addition, Honeywell (SGC) will maintain the (APU)s. Terms of the agreement were not disclosed.
ATR72-212A (777, VT-KAQ), delivery.
March 2008: Kingfisher Airlines (KFH) will eliminate the "Deccan" (DCC) brand, once the carriers complete their merger in late April, Kingfisher (KFH) Chairman, Vijay Mallya told reporters, according to widespread press reports. He also said Indian civil aviation authorities confirmed that Kingfisher (KFH) will be able to fly abroad using Deccan (DCC)'s original air operating certificate (AOC) beginning August 28. However, Kingfisher (KFH) parent, UB Group President & CFO, Ravi Nedungadi told "The Hindu Business Line" that "while there will be no change in the low-cost model of Deccan (DCC), we will decide on whether to keep the name or change it in another 2 to 3 months. It is not a corporate decision and would depend on the surveys regarding the brand in the market."
Rajiv Gandhi International Airport in Shamshabad near Hyderabad commenced commercial operations over the weekend. The facility, developed by the GMR Infrastructure-Hyderabad International Airport consortium, is India's first airport built under a private-public partnership model. Capacity is 12 million passengers annually, and it is the nation's first airport capable of handling an A380.
ATR72-212A (782, VT-KAR), delivery.
April 2008: Kingfisher Airlines (KFH) launched flights from Mumbai to Chandigarh (daily) and Ahmedabad (twice-daily) aboard A319s, as well as daily service from Delhi to Chandigarh and Goa.
ATR72-212A (786, VT-KAS), delivery.
June 2008: Kingfisher Airlines (KFH) is to begin flights linking India with London Heathrow (LHR) as part of its move into international operations later this summer. In March, (KFH) indicated it hoped to begin its international operations with services linking Bangalore to San Francisco, tentatively set for 27 August, after taking delivery of its first A330s and A340-500s over the summer. Speaking in an interview with the BBC, (KFH) Chairman & CEO, Vijay Mallya said the carrier remains committed to its international plans and that services to (LHR) would be among the first services launched. “A sound India - UK service is something that has good potential,” he says, noting the carrier will launch international flights in late August or the first week in September.
While the carrier intends to serve (LHR), it is still finalising its precise route plans. “We’ve got the slots at (LHR), so we are looking at Bombay (Mumbai) - London, though many people are trying to persuade me it should be Bangalore - London,” Mallya says.
Indian airlines have been late in making payments for jet fuel, reported India's "Economic Times," citing a top executive with Indian Oil Corp (IOC). Kingfisher Airlines (KFH) and Jet Airways (JPL) are among several carriers "delaying payments, in spite of seeking a very comfortable line of credit and huge discounts," the (IOC) executive told the paper. Kingfisher (KFH) reportedly built up "arrears" on a line of credit earlier this year, and was forced to switch to a "cash and carry" model of payment in which it pays immediately for fuel it needs. It paid down its debt and has transferred to other fuel providers except at airports where only (IOC ) operates, according to the report. Jet (JPL) still reportedly owes (IOC) for fuel it has purchased via a line of credit.
July 2008: The SpiceJet (ROJ) board announced that asset management firm WL Ross & Co will invest approximately $80 million in the New Delhi-based (ROJ) as Kingfisher (KFH)'s efforts to acquire the carrier were rebuffed. "We have no doubt that SpiceJet (ROJ) will fulfill its promise of emerging as India's leading airline," the board said in a statement, while Wilbur Ross Jr said his firm "believe[s] in the long-term validity of the low-cost airline model in India, and that fuel prices eventually will stabilize." Ross and WL Ross India Managing Director & CEO, Ranjeet Nabha will join the SpiceJet (ROJ) board. The airline operates 94 daily flights with 15 airplanes and holds a 10% domestic market share.
Kingfisher Airlines (KFH) Chairman, Vijay Vallya told journalists at the Farnborough Air Show that he had made an offer for SpiceJet (ROJ), but was rejected. "I like to do good deals and I won't do expensive deals," he said, according to "Reuters."
August 2008: After a busy round of consolidation, India’s airline industry seems to be stabilizing around three airline groupings with international ambitions: Jet Airways (JPL), Kingfisher (KFH), and Air-India (AIN), and three Low Cost Carriers (LCC)s: Indigo (IGO), SpiceJet (ROJ), and GoAir (GOZ). Regional carrier Paramount (PAT) also seems to have big ambitions.
GMR Hyderabad International Airport, developer and operator of the new Rajiv Gandhi International, said it received clearance from the Ministry of Aviation to levy a INR375/$8.66 user development fee on outbound domestic passengers.
The Indian government announced official approval for significant modernization and expansion projects at Kolkata (CCU) and Chennai airports that will bring the facilities to "international standard" and cost a combined $900 million. The 30-month project at (CCU) will cost an estimated INR19.43 billion/$452.4 million and expand annual handling capacity by 20 million passengers. The second runway will be extended to 3,293 m and made suitable for "large commercial airplanes," navigation facilities will be upgraded, airplane parking and additional taxiways will be added, and road and rail connections to the airport will be improved. The work first was proposed in April 2007. (CCU) handled 7.5 million passengers in the 2007 to 2008 fiscal year and is expected to process 24.7 million in 2015 through 2016.
At Chennai, INR18.1 billion will be spent on a similar 26-month project designed to increase capacity by +14 million passengers per year. In the recently completed fiscal year it processed 10.7 million passengers. The second runway will be extended and a new taxiway constructed, among other improvements, including a new domestic terminal building capable of handling 10 million passengers per year.
Kingfisher Airlines (KFH) plans to raise $400 million through an equity sale, possibly during the first quarter of next year. Chairman, Vijay Mallya told reporters that the exact nature of the sale has not been determined. "Everything depends on the right value," he explained. "Earlier, we tried to raise $300 million, but due to adverse market conditions, we have deferred this. Now we are targeting $400 million to run the operations." He added that the airline could achieve profitability within two years and that he expected the new London Heathrow (LHR) flights to be profitable.
3 A330-223 (927, VT-VJN; 939, VT-VJO; 946, VT-VJP), deliveries.
September 2008: Kingfisher Airlines (KFH) launches international service on September 3 with a Bangalore - London Heathrow, A330-200 flight. Kingfisher (KFH) acquired the air operating certificate (AOC) of Deccan Aviation (DCC), which this month will reach the mandatory five years of service required to fly internationally from India. A Directorate General of Civil Aviation official told "The Economic Times" that Kingfisher (KFH) already has secured permission to fly to 13 international destinations and eventually plans to fly to the UK, USA, (UAE), Singapore, Thailand, Maldives, Saudi Arabia, Kuwait, Bangladesh, Malaysia, Pakistan, and Hong Kong.
(KFH) plans to start Bangalore - San Francisco flights in the fourth quarter.
(IATA) (ITA) Director General & CEO, Giovanni Bisignani said that India's airlines could collectively lose as much as -$1.5 billion in 2008, and called on the nation to take "urgent action . . . to help Indian carriers weather the perfect storm of high costs and falling demand." Speaking in New Delhi to the Confederation of Indian Industry, Bisignani noted that commercial air traffic growth in India has slowed dramatically this year, rising +7.5% in the first six months of 2008 compared to growth of +33% for full-year 2007. He said the country needs to lower the cost for airlines to operate, improve its aviation infrastructure, and adopt global standards. "India is among the most expensive places on the planet to buy aviation turbine fuel," he said. "In August, it was +58% more expensive to buy fuel in Mumbai for domestic flights than in Singapore for international [flights]. Excise duties, throughput fees charged by airport operators, and state taxes of up to 30% for domestic flights, result in a cost structure that cannot support a competitive industry." He added that taxes on overflight charges, premium class tickets and airport charges are "embarrassments" that must be eliminated. Bisignani further called for "infrastructure investments," particularly in Mumbai, which he said "needs an airport that can adequately serve the financial capital of the world's second most populous nation. That means thinking much, much bigger."
Finally, he said that "global standards . . . should be at the heart of India's aviation policy," explaining that "nonstandard data transmission requirements [imposed by the Indian government] for Advance Passenger Information is an added cost burden . . . [and] a serious flaw." He added, "Aviation is a fast-changing industry that is fueling much of the Indian economic success story. But . . . India's decision-making is too slow. [The government needs to make] quick decisions based on global standards and build a solid platform for future expansion."
Kingfisher Airlines (KFH) has cut -300 jobs and returned two airplanes to lessors, the carrier confirmed. A spokesperson told the "Press Trust of India (PTI)" that 300 employees "have chosen to move on" as a result of a "concerted companywide effort aimed at minimizing the impact of the ongoing turbulence faced by the aviation industry." It was unclear how many were Kingfisher (KFH) employees and how many were with Deccan (DCC), which is being absorbed by the former. It told the "Business Standard (BS)" that the move is "part of a process of integration of the two entities." The paper reported that severance packages will cost Kingfisher (KFH) INR25 million/$550,760.
Further details about the returned planes were not available, with the company telling (PTI) it is "closely monitoring airplane utilization." It reportedly has deferred delivery of "at least" 29 A320 family airplanes and intends to sell "some" A340s, (BS) reported.
(KFH) is selling 2 A340-541s it had on order to Arik Air (AKI) - - SEE ATTACHED "FLIGHT" ARTICLE - - "KFH-AKI-A340-500-SEP08."
October 2008: Kingfisher Airlines (KFH) launched thrice-weekly, Mumbai - Nanded - Latur - Mumbai aboard an ATR72.
Jet Airways (JPL) and Kingfisher Airlines (KFH), India's two largest private carriers, announced the formation of an "alliance," that will include codesharing on both domestic and international flights and a wide-ranging pooling of resources. Each airline is losing money as they contend with rising costs and overcapacity in the Indian market and see cooperation as a way to lower costs and increase efficiency. "Such alliances are taking place all over the globe," Jet (JPL) Chairman, Naresh Goyal told reporters at a news conference in Mumbai. "This is the first such alliance in India. It is not a cartel, but essentially meant to save costs as airlines are losing money." Added Kingfisher (KFH) Chairman, Vijay Mallya, "This alliance will result in major cost saving, improve efficiencies through network synergies and cross-selling. If the airlines save money, they will pass it on to consumers." The carriers insisted they are not planning to merge. The two, which collectively control nearly 60% of the domestic Indian market, have agreed to cross-sell tickets, share crews on similar airplane types, and combine ground handling and fuel management operations. Passengers will be able to earn and use frequent-flier miles across both carriers.
India's airlines are estimated to have lost more than >$1 billion in the 12 months ended March 31. Jet Airways (JPL) CEO, Wolfgang Prock-Schauer said that Jet (JPL) expects to follow a $100 million loss in its last fiscal year with another loss for the year ending March 31, 2009.
Kingfisher (KFH) Vice Chairman, G R Gopinath told the "Indo-Asian News Service" that the alliance was "inevitable, as it is a matter of survival in these times when airlines the world over are going through their worst phase, due to a combination of factors, triggered by soaring fuel prices and followed by global economic slowdown and falling occupancy . . . In the prevailing situation, such an alliance makes sense and is in line with what has been happening with other international airlines. Indian carriers can no longer remain immune to the impact of global crisis in the aviation industry."
The Federation of Indian Airlines (FIA), of which both Jet (JPL) and Kingfisher (KFH) are members, in recent days asked for a $1 billion bailout from the government to help carriers manage the financial crisis. The (FIA) predicts collective losses of more than >$2 billion for India's airlines this year.
Kingfisher Airlines (KFH) and Jet Airways (JPL) are emphasizing that their newly formed "alliance" is not a merger or a precursor to one, but was necessary to "enable a stabilization of the Indian aviation industry in the larger public interest." Cooperation between the former archrivals likely will be extensive. "While maintaining their separate legal entities and brand entities, both Jet (JPL) and Kingfisher (KFH) will examine co-branding opportunities and have formed a core committee of senior management personnel from both companies, who will drive the various identified initiatives forward," the airlines said in a joint statement. They insisted that "there will not be any mutual equity investments." Statements from Jet (JPL) Chairman, Naresh Goyal and Kingfisher (KFH) Chairman, Vijay Mallya elicited a sense of deja vu for observers of India's troubled airline industry. The Chairmen said they hope to reduce losses by increasing synergies, instead of aggressively competing as they have for the past four years. They issued similar statements last year after acquiring smaller carriers. Jet (JPL) bought Air Sahara (SAQ), and Kingfisher (KFH) took over Deccan (DCC), but both acquisitions have failed to deliver the synergies and reduced costs promised and each airline's share price has taken a beating over the past year. Whether the new alliance produces different results, will become clearer in coming months.
Mallya argued this week that the "fundamentals for air transport in India remain sound," but noted that growth has slowed considerably in the last six months owing to "high fuel prices, back-breaking taxation, excessive airport charges and overcapacity."
The two carriers operate a combined 189 airplanes on 927 domestic and 82 international flights daily, and plan to interline to cut down on overlapping routes, a move they hope will help address what Goyal characterized as "irrational pricing" in the Indian market.
The alliance, subject to Directorate General of Civil Aviation approval, may allow each airline to deploy airplanes more rationally. Kingfisher (KFH)'s initial foray into international operations on the Bangalore - London Heathrow route has suffered so far from very poor loads. It is scheduled to take delivery of two A340-500s later this year and deploying them profitably in the current economic environment could be problematic. The tie-up with Jet (JPL), which already operates to Europe, Southeast Asia, the Middle East, and the USA, may help in that regard.
Kingfisher (KFH) said it lost -INR1.88 billion through the nine months ended March 31, narrowed from a -INR2.44 billion deficit in the year-ago period. It has changed the end of its fiscal year to March 31 from June 30 and will not report a 12-month result. "As of today we have no [employee] surpluses and certainly our cabin crew (CA) is intact and will retain jobs, but what is relevant today may not be so over a month," Chairman, Vijay Mallya told the "Indo-Asian News Service." "If we get rid of airplanes, there will be redundancy."
Kingfisher (KFH) and Jet (JPL) will return a combined 15 narrowbody airplanes to lessors through 2009, with eight coming from the former and seven from Jetlite (SAQ), a Kingfisher (KFH) executive told the "Business Standard." Kingfisher (KFH) cancelled an order for three A340-500s that were snapped up by Nigeria's Arik Air (AKI) and reportedly has opted to defer the delivery of 32 A320s.
November 2008: Kingfisher Airlines (KFH) defaulted on rental payments for four A320s on lease from GECAS (GEF), which complained to India's Directorate General for Civil Aviation (DGCA) and is seeking to repossess the airplanes. A Civil Aviation Ministry spokesperson confirmed the complaint to "Reuters." Kingfisher (KFH) quickly responded and secured relief from the Karnataka state court preventing the repossession. "Since the matter is sub-judice, the (DGCA) cannot take action on de-registering the airplanes," the ministry spokesperson told the news service, while a Kingfisher (KFH) spokesperson said only that the court "has heard our application and thought it fit to pass ad-interim orders for our protection."
A Kingfisher (KFH) official requesting anonymity told "The Economic Times," "There is no default . . . Had there been a default, the court would not have admitted our case. The fact that the court granted an immediate relief to us . . . demonstrates that the airline has an obvious and prima-facie case."
A (GECAS) (GEF) spokesperson said, "Our business and discussions with our customers are confidential," and declined to comment further.
Kingfisher (KFH), along with Jet Airways (JPL), and Air-India (AIN), recently received fuel bill relief from the government allowing the trio more time to pay and extending their credit for further purchases. Kingfisher (KFH) said last week that it already has returned two airplanes to lessors, and is "in discussion" for the return of eight more. It did not identify the airplanes nor the lessor.
The carrier reported a "loss from ordinary activities after tax" in the fiscal second quarter ended September 30 of -INR4.83 billion/-$100.5 million, a +90.9% increase from the -INR2.53 billion deficit suffered in the year-ago period. Its loss from operations before interest and one-time items deepened to -INR6.2 billion from -INR2.57 billion, even as revenue nearly tripled to INR13.23 billion. Its half-year loss from ordinary activities after tax was -INR6.41 billion, widened from -INR4.26 billion in the year-ago semester.
Kingfisher Airlines (KFH) has "received several expressions of interest from foreign airlines," Chairman, Vijay Mallya said in a statement cited by widespread press reports, and he pressed the government to allow foreign interests to acquire up to 25% of Indian carriers. "I believe aviation should be treated as per international norms and other industry sectors, where strategic investors can invest," he said. "This will secure the future of Indian aviation."
December 2008: Kingfisher Airlines (KFH) will launch daily, Mumbai - London Heathrow (LHR) service on January 5 aboard a new A330-200. It began serving (LHR) from Bangalore in September. It said it was granted approval to operate Mumbai - Hong Kong, Mumbai - Singapore, Chennai - Colombo, Bangalore - Colombo, Kolkata - Dhaka, Kolkata - Chittagong, Bangalore - Bangkok, and Mumbai - Bangkok service and will announce launch dates "in due course."
2 A320-232s (3524, VT-DNU; 3543, VT-DNT), delivery and leased to Mandala Airlines (MND) as (PK-RML; & PK-RMK).
January 2009: The Indian government appears to be softening its stance on foreign direct investment in the country's airlines as they contend with large losses and overcapacity. Civil Aviation Minister, Prafel Patel told reporters this week that "there is a more reasonable case now than there was 3 to 4 years ago" to allow foreign carriers to acquire up to 25% of an Indian carrier. Kingfisher Airlines (KFH) has been a strong proponent of investment liberalization. "There is no clarity on the issue. This is one of the proposals which can be considered," Patel was quoted as saying. "Every airline has a problem and we have to look for extraordinary solutions. It is not formalized yet. It is only a thought process. We are not saying we will give it. We just feel the need," he said.
The Indian commercial aviation industry experienced a rough 2008. According to "The Hindu," passenger numbers fell 5% to 40.8 million following growth rates of 32.5% in 2007 and 46.5% in 2006. Jet Airways (JPL) led with 8.8 million, followed by Air-India (AIN) with 6.6 million, (KFH) with 6.3 million, Deccan (DCC) with 5 million, IndiGo (IGO) with 4.7 million, SpiceJet (ROJ) with 4.1 million and Paramount Airways (PAT) with 630,000.
(KFH) last week launched daily flights to Colombo from Bangalore and Chennai aboard A320s.
February 2009: Kingfisher Airlines (KFH) launched four-times-weekly, Mumbai - Solapur service on February 17 aboard a Kingfisher Red (DCC) ATR turboprop.
March 2009: Kingfisher Airlines (KFH) announced the following new services: Twice-daily, Mumbai - Vadodara; daily, Mumbai - Thiruvananthapuram (both aboard Kingfisher Red (DCC); daily, Hyderabad - Aurangabad; and daily, Mumbai - Bhuj, starting March 29; plus daily, Mumbai - Patna - Ranchi, from April 6.
The Indian economy, not terribly dependent on trade, grew +5% last quarter.
Indian airlines carried 3.3 million passengers on scheduled flights last month, about level with January. (KFH) led with 904,000 (27.1% market share, 74.3% LF load factor), followed by Jet Airways (JPL) at 597,000 (17.9%, 68.7% LF) and Air India (AIN) at 574,000 (17.2%, 66.3% LF).
July 2009: Kingfisher Airlines (KFH) reported a -INR2.43 billion/-$50 million loss in its fiscal first quarter ended June 30, widened from a -INR1.58 billion deficit in the year-ago period, according to Dow Jones. Revenue dropped -6% year-over-year to INR13.14 billion and the board reportedly approved a INR5 billion equity raising through a rights issue, follow-on offer or placement of deposit receipts. (EBITDA) was positive at INR2.54 billion compared to a -INR3.24 billion loss in the quarter ended June 30, 2008. (KFH) suffered a -INR16.09 billion loss in the fiscal year ended March 31.
August 2009: Kingfisher Airlines (KFH) will start daily, Kolkata - Bangkok service August 14 aboard an A320 family airplane.
September 2009: The Kingfisher Airlines (KFH) board approved measures to raise up to $100 million, largely through global depository receipts, in addition to the INR5 billion/$101.4 million rights issue approved last month, according to a filing with the Bombay Stock Exchange cited by press reports from India. The board also approved a doubling of the carrier's authorized share capital to INR10 billion. All decisions are subject to shareholder approval.
(KFH) reported a -INR2.43 billion/-$49.2 million loss in its fiscal first quarter ended June 30, widened +53.7% from the -INR1.58 billion deficit reported in the year-ago period. The loss for the fiscal year ended March 31 was -INR16.09 billion. First-quarter revenue fell -6% year-over-year to INR13.14 billion. (KFH) said it cut capacity -23% during the quarter but still managed a 25.3% domestic market share. It said rising yields mitigated the drop in revenue. Domestic unit revenue rose +12%.
(KFH) will launch daily flights from Mumbai to Hong Kong (September 16) and Singapore (September 17) aboard A330-200s. It will cease its daily service from Bangalore to London Heathrow and Colombo on September 15.
(KFH) plans to raise $150 to $175 million through both a rights issue and global depository receipts, parent UB Group CFO, Ravi Nedugandi told Press Trust of India. "Timing will be before March 2010," he said, adding that the carrier is carrying debt of approximately INR60 billion/$1.23 billion.
October 2009: Kingfisher Airlines (KFH) suffered a -INR4.19 billion/-$88.8 million loss in the fiscal second quarter ended September 30, a +13.3% improvement from the -INR4.83 billion deficit suffered in the year-ago period, according to a filing with the Bombay Stock Exchange cited by numerous press reports from India. Revenue dropped -13.7% to INR11.42 billion.
November 2009: Indian airlines carried 4 million passengers in October, up +26.7% from the year-ago month. Passenger traffic through the year's first 10 months, rose +3.3% year-over-year to 36 million. Market share was divided as follows: Jet Airways (JPL) and JetLite (SAQ) 27.7%, Kingfisher Airlines (KFH) 20.7%, Air India (AIN)/(IND) 18.6%, IndiGo (IGO) 13.6%, and SpiceJet (ROJ) 12.4%.
December 2009: Topping the list of money losing airlines were India's three reporting carriers: Kingfisher Airlines (KFH) results were disastrous, while those at Jet Airways (JPL) and SpiceJet (ROJ) weren't all that much better. An over-supplied domestic market and declining demand proved a toxic combination.
India is making a considerable effort to join commercial aviation's environmental effort, Civil Aviation Director General, Nasim Zaidi said at the USA-India Aviation Partnership Summit in Washington, with authorities committed to establishing a national inventory of carbon dioxide emissions for the sector (with a base year of 2005) along with programs compelling both airlines and airports to be more efficient and green. "As a developing economy we have a concern of maintaining a balance between the sustainability of a growing economy and the adverse impact this growth can have on climate change," Zaidi said, adding that the Indian government has committed to a nationwide -20% to -25% cut in emissions by 2025. "The objective is to provide enough space to the airlines to grow without adversely affecting the environment."
An Aviation Environment Unit reporting to the (DGCA) will identify problem areas, provide technical guidance and suggest solutions covering both environmental issues and noise to industry stakeholders, he said. Carriers, meantime, have been asked to create similar units within their own companies. "Our fuel efficiency is not in line with the global average" of 0.4 liters per (RTK), he admitted. India currently is operating at 0.54 liters per (RTK), with Kingfisher Airlines (KFH) above 0.6 and Jet Airways (JPL) around 0.5, Zaidi said. "We have work to do in this area." India's (RTK) production ranks 12th in the world, considering the European Union (EU) as a single state.
Airlines have been instructed to adhere to proper maintenance procedures, minimize Auxilliary Power Unit (APU) usage, use Performance Based Navigation (PBN) and continuous descent and consider one-engine taxiing, among other initiatives. (PBN) has been implemented at Delhi, Mumbai, and Ahmedabad and is in progress at Chenai. On the ground, airlines and airports are being asked to monitor waste and look into using solar panels for lighting, constructing plants to recycle waste water or to generate electricity from waste and using compressed natural gas for ground vehicles.
Zaidi also said that India has "expressed our willingness" to join the Commercial Aviation Alternative Fuels Initiative.
January 2010: Kingfisher Airlines (KFH) reported a -INR4.2 billion/-$90.9 million loss in its third fiscal quarter ended December 31, widened -1.7% from -INR4.13 billion in the year-ago period, with about half of the deficit resulting from one-time exceptional items and foreign exchange losses.
Third-quarter revenue fell -5% to INR13.7 billion and operating expenses were cut -17% to INR14.48 billion. Employee and fuel costs decreased -22% and -20% respectively, but INR2.18 billion in exceptional items (compared to INR470 million the year before) erased the effect of the cost cuts.
(KFH) said passenger numbers rose +4.2% to 2.7 million. Traffic climbed +14.8% to 2.66 billion (RPK)s against a -7.5% cut in capacity to 3.57 billion (ASK)s, fueling a +14.5-point surge in load factor to 74.6% LF. Yield plunged -18.7%, however, to INR5.08. Unit cost was lowered -10.4% to INR4.06. (KFH) ended the quarter with 68 airplanes in operation compared to 83 on December 31, 2008.
On domestic services, revenue per (ASK) rose +7% year-over-year and unit cost was reduced -6%. (EBITDA) on the domestic operation was INR110 million, reversed from a heavy loss in the year-ago quarter. (RASK) on international flights more than doubled and (CASK) was cut approximately -50%, although the company suffered negative (EBITDA) of INR890 million on its international operation. It serves seven international destinations - - six in Asia, plus London Heathrow. It said it plans to expand its international network and "utilize [the] narrow body fleet on lucrative short-haul markets."
Passenger traffic across the Indian industry rose +30.5% year-over-year, while load factor soared 13 points, (KFH) said. Yields also climbed as premium traffic "has seen a comeback," it said. "This buoyancy in passenger volumes is expected to continue as the Indian economy rebounds," according to the airline.
Through the first nine months of its fiscal year, it lost -INR10.75 billion, up +2% from -INR10.55 billion in the year-ago period. Revenue fell -9% to INR38.19 billion and passenger boardings grew +1.4% to 8.2 million.
Indian airlines carried 44.5 million passengers in 2009, up +7.9% from the prior year, the Ministry of Civil Aviation reported. Fourth-quarter traffic soared +30.5% year-over-year to 12.5 million passengers and December traffic rose +34.8% to 4.5 million.
Jet Airways (JPL) (17.9%) and JetLite (SAQ) (7.5%) led all companies in full-year market share with a combined 25.4%, followed by Kingfisher Airlines (KFH) at 23.9% and Air India (AIN) with 17.5%. IndiGo (IGO) (13.9%) and Spicejet (ROJ) (12.4%) rounded out the top five. Indian carriers cut capacity during the first half of 2009 but registered year-over-year increases in both (RPK)s traffic and (ASK)s capacity in each of the year's last six months.
December (RPK)s rose nearly +40% over the year-ago month, with average load factor surpassing 80% LF owing to the peak season. IndiGo (IGO) posted a 90% LF load factor for the month, with Jet (JPL) posting the lowest figure at 78.2% LF.
India's airlines transported 43.8 million passengers on domestic routes in 2009. Kingfisher (KFH) led the way with a 23.9% share equal to 10.5 million passengers, followed by (JPL) at 17.9% and (AIN)/(IND) at 17.5%.
February 2010: Kingfisher Airlines (KFH) announced the launch of Kingfisher Xpress, a door-to-door cargo delivery service that the carrier said will be "India's first and only same-day delivery by air service, with a money-back guarantee." Pickup facilities will be offered in Mumbai, New Delhi, Bangalore, Hyderabad, Chennai, and Kolkata with guaranteed same-day delivery to those six destinations plus Bagdogra, Coimbatore, Kochi, Goa, Guwahati, Indore, Raipur, Ranchi, Lucknow, Nagpur, Pune, and Srinagar. Next-day delivery will be available to 20 additional cities.
(KFH) was granted traffic rights from New Delhi to London Heathrow (LHR) (its first European destination), Hong Kong (HKG), Bangkok and Dubai, and from Mumbai to Colombo, Bangkok and Dubai. No launch date was announced. (KFH) will operate A330s to (LHR) and (HKG), and A320 family airplanes on the remaining routes. Chairman & CEO, Vijay Mallya said it "may even look at inducting new airplanes into our fleet sooner than planned so that we are fully geared to capitalize on the upturn. We are actively pursuing various options for fund raising and our plans are on track."
Buoyed by Japan Airlines (JAL)/(JAS)'s decision to maintain its membership in the Oneworld (ONW) alliance and the USA Department of Transportation's tentative approval of transatlantic antitrust immunity (ATI), the (ONW) announced that its Asian presence will be expanded further with the 2011 addition of India's Kingfisher Airlines (KFH).
(KFH) officially applied to India's Ministry of Civil Aviation for permission to join the group, and an official target date will be announced once that regulatory procedure is complete. The (ONW) alliance set 2011 as a preliminary goal. (KFH) will become the (ONW)'s 13th member and is sponsored by British Airways (BAB). Russia's S7 Airlines (SBR) is set to join this year. "Becoming part of the (ONW) alliance would be one of our most significant steps so far and is right in line with our vision to become one of the world's top airlines," (KFH) Chairman & CEO, Vijay Mallya said.
(BAB) CEO, Willie Walsh called (KFH) "an ideal fit" for the group and fired a volley at rival Star (SAL) Alliance by claiming that "the (ONW) alliance's priority is the quality, rather than the quantity, of our member airlines." The (SAL) alliance currently has 26 members with four more, including Air India (AIN), preparing to join.
(KFH) will add 58 destinations to the (ONW) alliance map, all in India, expanding the group's combined network to 800 airports in nearly 150 countries. (ONW) alliance carriers currently serve Bangalore, Chennai, Delhi, Hyderabad, and Mumbai.
(KFH) began flying internationally in September 2008 and operates to (ONW) hubs at London Heathrow, Bangkok, Hong Kong, and Singapore, in addition to Colombo, Dubai, and Dhaka. (KFH) serves a total of 63 Indian and seven international destinations with a fleet of five A330s, eight A321s, 23 A320s, three A319s, 25 ATR72-500s and two ATR42-500s and has five A380s and five A350s on order. In the nine months to December 31, 2009, (KFH) reported a loss of -INR10.75 billion/-$232.8 million.
Kingfisher Airlines (KFH) named former Delta Air Lines (DAL) Managing Director Revenue Management, Pricing & Network, Amit Agarwal as Senior VP Corporate Development & Planning.
March 2010: Optimism regarding the gradual recovery of India's commercial aviation industry was dampened in Hyderabad as the India Aviation show and conference opened amid concerns that a new 10% tax on domestic tickets could stifle growth. On the bright side, Civil Aviation Minister, Praful Patel said the industry handled the recession "with composure" and that he has "cautious optimism" about 2010.
Airbus (EDS) Executive VP Marketing & Contracts, Kiran Rao said India's passenger airplane market will increase at least +12% this year, according to "Mint," which added that (EDS) delivered 29 airplanes to Indian airlines in 2009. "People are starting to discuss their fleet requirements once again and there is a growing interest," he said. IndiGo (IGO) President, Aditya Ghosh told "Mint" that (IGO) plans to add +10 A320s rather than six during the fiscal year starting April 1.
Patel told reporters that India could absorb about 300 new airplanes over the next five years and that there would be sufficient demand to increase the number of airports from 90 to nearly 400. "Demand for pilots (FC), which evaporated last year, is significant now with close to 120 flying schools operating in the country. The industry will see a very strong path of recovery from the beginning of 2011," he told "The Business Standard."
But Patel was among many who urged that the government repeal the 10% service tax on domestic air travel and scheduled to start in April. A similar tax on international flights already has been cancelled. He said the Ministry of Civil Aviation will ask the Ministry of Finance to do the same for domestic operations. The Federation of Indian Airlines also will lobby authorities, and executives admitted that fares may rise if the tax is implemented.
"The service tax and increased operating cost would inevitably result into hike in fares. The industry needs relief, not the additional taxes," Kingfisher Airlines (KFH) Chairman & CEO, Vijay Mallya told "The Economic Times." "There is a recovery in passenger traffic. But the process of recovery will be impacted if airlines are burdened with taxes."
Central Board of Excise & Customers Chairman, V Sridhar told the "Times" that the government is discussing the issue with airlines and may reduce the rate to one "which is not too excessive and should not pass undue burden."
Kingfisher Airlines (KFH) has no airplane deliveries planned until 2012 but over the following five years it plans to more than double its current fleet of 66. According to a presentation to investors, (KFH) currently operates three A319s, 23 A320s, eight A321s, five A330s, 25 ATR72s and two ATR42s. In 2012, it will take delivery of six A320s and four A330s. In 2013, it plans to take nine A320s and three A330s, and the following year, it will add seven A320s, four A330s and two A350s/A380s (it did not specify). In 2015 to 2016, it will take 20 A320s, four A330s and eight more A350s/A380s. It has 67 deliveries scheduled overall and said it has options to purchase four A330s "every year from 2012, the decision for which would be taken closer to the date, given the operating environment."
September 2010: Kingfisher Airlines (KFH) Chairman & Managing Director, Vijay Mallya announced that former SpiceJet (ROJ) CEO, Sanjay Aggarwal would take over as CEO "with immediate effect."
Mallya, the charismatic United Brewery tycoon, has been the face of the airline since it launched in 2005 with the same branding as the successful Kingfisher beer. "I will continue in my role as Chairman & Managing Director and Sanjay will report directly to me," he explained, adding that all executive VPs who formerly reported to him will "henceforth report directly to Sanjay."
Meanwhile, he told media that (KFH)'s plan to raise funds through a share offer, including $250 million via the sale of global depository receipts, will commence shortly after (KFH) completes a debt restructuring with a consortium of banks, according to India's "Business Standard." "In broad terms, about 30% of [the airline's] total debt would be converted by banks into capital," he said, adding that interest on debt repayments will be lowered by an "an average of 11%" and (KFH) will be allowed to make repayments over a 9-year period following a 2-year moratorium.
He said (KFH) is attempting to entice investors from around the world. "We are going to be in the USA next month with some preliminary road shows," he said. "We have already met a whole bunch of investors in the USA, Europe, Hong Kong, and Singapore, all of whom have expressed strong interest in investing in (KFH)."
Aggarwal resigned from the helm of SpiceJet (ROJ) in early July following a change in (ROJ)'s ownership. Mallya noted that Aggarwal "successfully turned [SpiceJet (ROJ)] into profit. He has a good understanding of the Indian aviation industry and the various unique business imperatives in India."
November 2010: American Airlines (AAL) and Kingfisher Airlines (KFH) reached a code share agreement under which (AAL) will place its code on its London Heathrow (LHR) service to Delhi and Mumbai and on (KFH) domestic service beyond Delhi. (KFH) will places its Information Technology (IT) code on (AAL)'s Chicago O'Hare (ORD) service to Delhi as well as on selected (AAL) flights between the USA and (LHR). The code share on (AAL)'s flight to (ORD) will be the first time (KFH) has placed its code on any flight operating into the USA. Subject to regulatory approvals, the agreement will begin in 2011.
December 2010: India's Ministry of Civil Aviation reported that India's airlines carried +18.9% more domestic scheduled passengers in the first 11 months of 2010 compared to the corresponding period in 2009. As of November 30, Jet Airways (JPL) mainline had the highest share of the fragmented Indian domestic market at 19.2%, followed by Kingfisher (KFH) at 19.1%, IndiGo (IGO) at 17.3%, Air India (AIN)/(IND)/(AXB) at 17.1%, Spicejet (ROJ) at 13.2%, (JPL) affiliate JetLite (SAQ) at 7%, and Go Air (GOZ) at 6.9%, the ministry stated.
January 2011: Kingfisher Airlines (KFH) plans to launch daily flights on four new domestic routes in January. The new routes are Mumbai - Jabalpur, Jabalpur - Indore, Indore - Mumbai, and Mumbai - Belgaum. "Kingfisher Airlines (KFH) is the first and only airline to offer connectivity to both Jabalpur and Belgaum from Mumbai. The flights to Belgaum will commence from 10 January 2011, while the flights from Mumbai to Jabalpur and Indore will commence from 24 January 2011," says Manoj Chacko, Executive VP Commercial.
(KFH) will deploy ATR airplanes on the Mumbai - Belgaum route, and operate A320 family airplanes on the other routes.
SEE VIDEO OF WORLD TOP 15 AIRLINE CABIN ATTENDANTS - -
May 2011: Kingfisher Airlines (KFH) first quarter net loss was -$5 million or -$99 million, less special items. Demand is strong in India's domestic market and its new international routes are showing positive development.
June 2011: Domestic Indian traffic data published by their regulatory authority the (DGCA) for January - May showed a +18% increase with market share of: Jet Airways (JPL) 26%; Kingfisher Airlines (KFH) 20%; IndiGo Airlines (IGO) 20%; SpiceJet (ROJ) 14%; Air India (AIN)/(IND) 13%; and GoAir (GOZ) 7%.
October 2011: When the young and inexperienced Kingfisher (KFH) ordered every plane that Airbus (EDS) had to offer (A319s, A320s, A321s, A330s, A350s and yes, A380s) the writing was on the wall. Sure enough, (KFH), however good its service, suffered year after year of losses. And today, it’s an airline with a badly scarred balance sheet still flying only thanks to banks agreeing to convert debt into equity. So what to do next? Kingfisher (KFH) is now dumping its single-class, low-fare product, marketed as Kingfisher Red (DCC), to focus exclusively on the full-service market. That was its original intention upon launching in 2005, before it complicated its business model by buying India’s first-ever Low Cost Carrier (LCC) Air Deccan (DCC) in 2007. At the same time, however, it’s adding more seats to its planes, while also focusing on secondary markets with ATRs and building its international network that now comprises eight cities: London, Hong Kong, Singapore, Dubai, Bangkok, Kathmandu, Colombo, and Dhaka.
(KFH) justified its plans to close down its low-cost carrier (LCC) (DCC) in four months saying the operating costs involved were the same as in a full-service carrier and the revenues lesser.
Maintaining that there was more competition in the no- frill segment than the full-service segment in India, (KFH) CEO, Sanjay Aggarwal said the decision would help (KFH) generate additional revenue after its exit from the low-cost service, where competition was more intense and a price war could hit the margins.
Seeking to quell concerns emanating from the decision to shut down (DCC), he said the move would rather generate incremental revenue for the company.
Kingfisher Red's (DCC) fleet of ATR42-500s and ATR72-500s turboprops will be retained, and after the airplane's interior cabins are refurbished, they will be integrated into (KFH)'s mainline fleet. The additional turboprops will add around +10% more capacity and the process will be completed by the end of this year.
November 2011: Investors, apparently, weren’t convinced by embattled billionaire Vijay Mallya’s assurances that he was closing in on a number of deals that would save his debt-ridden Kingfisher Airlines (KFH): the company’s stock was trading down -15% recently.
But India’s second-largest carrier by market share isn’t the only airline whose finances are being questioned. With the media searchlight trained on (KFH), attention has drifted away from what many analysts and industry members believe is a root cause of the crisis roiling India’s aviation sector: debt-ridden, loss-making, price-undercutting, state-run carrier Air India (AIN)/(IND).
Mallya insisted he was about to conclude some life-saving deals. If investors believed him, they should have piled back into Kingfisher Airlines (KFH) when markets opened. Instead, they have continued to stay away.
Sharan Lillaney, aviation analyst at Angel Broking, said investors were reacting to reports that the civil aviation minister had categorically ruled out a bailout for (KFH) – even though Mallya himself insists he is not looking for one. “The civil aviation minister has said they will not provide any bailout – I think that is why the stock is reacting,” Lillaney said. “[Mallya] clearly mentioned that he didn’t need a bailout, but clearly the markets thought differently.”
But industry leaders say there is another reason for all the turmoil. M Shivkumar, Head of Finance at Jet Airways (JPL), India’s biggest carrier, laid the blame squarely at the door of Air India (AIN)/(IND). “Air India (AIN)/(IND) is discounting fares and that’s absolutely a problem,” he told "Bloomberg." “Ideally, fares should go up when oil-import costs go up. That’s not happening and that’s why airlines are in this situation.”
Every Indian carrier (with the exception of IndiGo (IGO)) is running up huge losses even though the number of passengers flying in the first nine months of 2011 rose by +19% from the same period a year earlier. High fuel prices and sales tax and Air India (AIN)/(IND)’s price undercutting are the principal causes.
Air India (AIN)/(IND) has been unprofitable since 2007. But it has received Rs32 billionn/$625 million in government bailouts and is asking for another Rs65 billion before the end of the fiscal year that ends in March 2012.
Kingfisher (KFH), which is $1.4 billion in debt, reported a net loss in the quarter ending in September 2011 of -Rs4.69 billionn, twice the size of its -Rs2.31bn loss a year earlier (even though revenues climbed +11% to Rs15.3 billion).
Jet Airways (JPL) posted a net loss of -Rs7.13 billion for the same quarter; last year, it had a profit of +Rs124 million. Spicejet (ROJ), meanwhile, reported a loss of -Rs2.4 billion compared to a +Rs101.1 million profit last year.
Even IndiGo (IGO) (which is unlisted and does not publish results but is universally held to be profitable) may be losing money on its flights. Analysts say it makes most of its money by selling its airplanes and leasing them back.
IndiGo (IGO) placed one of the largest commercial jet orders in history in January when it signed a $15.6 billion, 180-plane deal with Airbus (EDS).
Air India (AIN)/(IND) has no need to sell its planes. Despite its reported $8.57 billion of debt: “A government panel agreed to provide sovereign guarantee to Air India (AIN)/(IND)’s debt obligations totaling [$3.8 billion] towards airplane loan repayments till 2020”, according to the "Indian Express" newspaper.
Such bailouts will continue, analysts told "beyondbrics," because the flag carrier employs some 50,000 - 60,000 Indians.
Lillaney said there have been some signs the government is telling Air India (AIN)/(IND) (notorious for its labour unrest, flight delays and surly customer service) to change its business model. “People don’t trust the airline; they don’t like to travel on Air India (AIN)/(IND),” he said.
Indian airlines aren’t the only ones complaining about the "Maharajah," as Air India (AIN)/(IND) is known. As the "Financial Times" reported, the Air Transport Association (ATA) representing USA airlines is suing the USA Export-Import Bank over $3.4 billion in loan guarantees the bank is providing (AIN)/(IND) to purchase 30 planes from Boeing (TBC), a move the airlines feel unfairly disadvantages USA carriers.
Cash-strapped Kingfisher Airlines (KFH) has defaulted on 1 billion rupees/$19.5 million of payments to the Airports Authority of India, prompting the state-run airport operator to ask for more bank guarantees.
"We have already encashed 1 billion rupees worth of guarantees given by Kingfisher (KFH) against its dues," Airports Authority Chairman, VP Agrawal said. The authority has sought additional bank guarantees from Kingfisher (KFH) to cover its remaining arrears of 2.17 billion rupees, he said.
December 2011: Kingfisher Airlines (KFH) pledged assets ranging from its brand to office furniture for bank loans of as much as 64.2 billion rupees/$1.2 billion.
A luxury villa in the western Indian state of Goa, two helicopters, a building in Mumbai and shares have also been used as collateral for loans as of November 30, Junior Finance Minister, Namo Narain Meena said in response to a question in parliament in New Delhi. The total value of the guarantees, including furniture and fixtures worth 3.3 billion rupees, was 52.4 billion rupees, he said.
Vijay Mallya, (KFH)’s billionaire Chairman, said on December 5 that (KFH) will meet lenders to seek working capital loans to pay for operating costs and fuel. (KFH) has also cut flights, scrapped low-cost services and delayed A380s deliveries as part of a turnaround following 16 straight quarterly losses.
The brand loan of 41 billion rupees was based on a valuation made by accounting firm Grant Thornton as of April 23, 2010, he said. (KFH) then had a market value of 13.2 billion rupees, which has since fallen to about 11.9 billion rupees, according to data compiled by "Bloomberg."
The airline will start repaying loans to the State Bank of India, the nation’s biggest lender, from September 2012, Meena said. He didn’t comment on the other 18 lenders of a group that has lent to (KFH).
(KFH) got as much as 12.1 billion rupees of new loans earlier this year after banks converted 13 billion rupees of existing debt into preferred shares. The State Bank has no plans for a second round of debt restructuring for (KFH), Meena said.
(KFH) fell -3.8% to 23.95 rupees in Mumbai trading. The stock has declined -64% this year, compared with a -21% drop in the BSE India Sensitive Index.
(KFH) and Jet Airways (JPL) have lost a combined -63 billion rupees in three years as low fares and rising fuel prices offset gains from surging passenger numbers. Indian tax authorities pursued legal action against (KFH) after it failed to pay service tax in the fiscal year that began April 1, S K Goel, Chairman of the Central Board of Excise & Customs, told reporters in New Delhi.
(KFH) plans to raise about 10 billion rupees in new loans, Ravi Nedungadi, Chief Financial Officer at parent, UB Group, said on November 15. The company may also hold a rights offer before the end of March and sell property in Mumbai for funds.
(KFH) has about $1.4 billion of debt and a debt-to- asset ratio of 82%, according to data compiled by "Bloomberg." Jet Airways (JPL)’s ratio is 67%, while SpiceJet (ROJ) is at 7.7%.
January 2012: Kingfisher Airlines (KFH) is contemplating a significant cost-reduction program, according to reports in Indian media. The privately owned airline did not confirm the reports, which claim (KFH) is considering a plan that would include -2,000 job cuts and a hiring freeze. Increased work hours for employees is also reportedly under consideration.
According to the Press Trust of India, (KFH) has around 7,300 employees, already about -300 fewer than in March 2010.
Trouble continued to mount for Kingfisher Airlines (KFH), as both its largest creditor and the country's top aviation official publicly criticized the carrier. State Bank of India (SBI) Chairman, Pratip Chaudhuri told reporters that (KFH) has been classified as a non-performing asset. "They are in default. Kingfisher (KFH) has been unable to pay its dues," he said, according to multiple media reports from India. (SBI) is (KFH)'s largest creditor.
Meanwhile, India's Directorate General of Civil Aviation (DGCA) carried out an audit of Indian airlines that found, unsurprisingly, severe "financial stress" in the domestic industry. But, in particular, the audit report said "a reasonable case exists for withdrawal of [KFH's] airline operator certificate (AOC), as their financial stress is likely to impinge on safety." According to "The Times of India," the (DGCA) said that nearly a third of (KFH)'s fleet of 64 airplanes "are grounded due to want of spares, engines, components, etc."
(DGCA) Head, Bharat Bhushan walked back the report slightly, emphasizing that (KFH) is not in imminent danger of losing its (AOC). But he told the "Financial Times:" "They need to pull up their socks, otherwise they risk being grounded. They need to address some of the problems we have found and reassure us that their financial troubles will not affect passengers' safety."
In a statement, (KFH) said that "the (DGCA) has asked Kingfisher Airlines (KFH) to provide a specific timeline for getting the grounded airplanes back in the air and for its recapitalization efforts. We would like to reassure our valued guests that at (KFH), safety is of paramount importance, and that our scheduled flights will continue to operate with utmost safety in full compliance with regulatory requirements."
(KFH), founded in 2005 by United Brewery tycoon, Vijay Mallya, is reportedly considering a major cost-cutting program. Mallya had hoped an alliance formed with Jet Airways (JPL) in late 2008 would solve (KFH)'s long-running fiscal problems.
Momentum appears to be building toward removing barriers to foreign airlines investing in Indian airlines, potentially opening up a new source of capital for the country's struggling air transport industry.
Currently, non-Indian airlines cannot invest in Indian airlines, though non-airline foreign investors are allowed to own a 49% stake. A recent government-appointed panel recommended that foreign airlines be allowed to buy as much as 49% of Indian carriers, and high-ranking government officials appear open to the proposal.
New Indian Civil Aviation Minister, Ajit Singh told "The Hindu Business Line" that he and the Ministers of Finance and Petroleum will review the panel's recommendation and make a decision shortly on whether to back legislation opening up foreign direct investment by airline companies.
"Airlines today basically require working capital," he said. "They need money. If the foreign companies can invest in these airlines, it is fine."
February 2012: Troubled Kingfisher Airlines (KFH) received more bad news when the Oneworld (ONW) Alliance put the Indian carrier's entrance into the alliance, which had been planned for February 10, "on hold."
The Oneworld (ONW) Alliance said (KFH) needs "time to strengthen its financial position." (KFH) became a Oneworld (ONW) Alliance-member elect in 2010.
(ONW) Alliance (CEO), Bruce Ashby said, "These are turbulent times for the airline industry in India and many other parts of the world. We have been working closely with (KFH) over the past months and it has become increasingly clear recently that (KFH) needs more time to resolve the financial issues it is confronting before it can be welcomed into the (ONW) Alliance."
(KFH) Founder & Chairman, Vijay Mallya said, "In light of the many priorities centered around (KFH)'s recapitalization efforts, we felt it prudent to defer our entry into the alliance for a little while."
Troubled Kingfisher Airlines (KFH) has not paid employees since December and was unable to make a planned salary disbursement this month
India's "The Economic Times and Mint" newspapers quoted a February 11 email to airline employees from (CEO) Sanjay Aggarwal, stating, "Unfortunately, we got hit by a couple of large unanticipated payments which had to be addressed on an emergency basis." This necessitated another paycheck postponement, he explained.
"We are in serious discussions with several potential investors and expect to recapitalize the airline in the very near future," Aggarwal wrote to workers. "Let us ensure we put our best foot forward to ensure these investors see our resolve and attitude even in these difficult times."
Later, (KFH) edged closer to the brink after nearly a week of mass cancellations of flights and the resignation of dozens of (KFH)’s pilots (FC).
Vijay Mallya, the flamboyant liquor baron who owns a majority stake in Kingfisher (KFH), said he was determined to keep the airline flying and blamed a cash crunch on the tax authorities who have frozen its bank accounts over outstanding dues.
“I am absolutely committed to keeping the airline going unless some government agency wishes to ground it,” Mallya told reporters. “The point is our banks accounts have been frozen by income tax authorities very suddenly and that has crippled us.”
(KFH) shares plunged nearly -20% in early trade ahead of a meeting between the airline’s top executives and the country’s aviation regulator. The Directorate General of Civil Aviation (DGCA) has asked (KFH) to explain the recent cancellation of more than >100 flights.
Of the 64 planes in its fleet, (KFH) is using just over a dozen to operate flights currently, stranding thousands of passengers at airports across the country.
With one of the world’s most expensive yachts and a cricket and Formula One team, (KFH)’s billionaire Chairman is known as the “King of the Good Times” for a jet-set lifestyle that has shadowed India’s own rise as an economic power.
The 56-year-old Mallya is also Chairman of United Breweries (Holdings), a conglomerate with interests as diverse as aviation, breweries, biotechnology and real estate. The group has annual sales of more than >$4 billion.
But his airline (named after his famous brand of Indian beer) has become one of the main casualties of high fuel costs and a fierce price war between a handful of budget carriers which, between them, ordered hundreds of airplanes for delivery over the next decade in an ambitious bet on the future.
The "Mint" newspaper, citing a government official, said (KFH) will return two A320s to lessors this month due to payment defaults. A (KFH) spokesman did not respond to calls by "Reuters" for comment.
Other media reports said that 50 (KFH) Flight Crew (FC) Captains have resigned over the past week, taking to more than >300, the number of pilots (FC) who have quit since last September.
“A panic button has already been pressed,” one (KFH) senior pilot (FC) told "Reuters." “Everyone is looking out for opportunities. Resignations are unlikely to stop.”
Rising jet fuel prices and cut-throat fare competition have taken their toll across the Indian airline industry despite passenger growth of nearly +20% last year.
Five out of six major carrier are losing money and analysts estimate that the industry overall is on course to lose -$3 billion for the year ending next month.
(KFH), which until this year was India’s second-largest airline, has not turned a profit since it was founded in 2005 and is carrying a debt burden of $1.3 billion.
Its revenue has been in decline since the end of last year and now, strapped for cash, it has resorted to cancelling flights. Staff are not being paid and tax bills remain outstanding — - adding a further $477 million to what it owes, according to Kotak Institutional Equities.
Shares in (KFH) have dropped -63% since the start of last year, shrinking its market value to $269 million.
The airline’s banks, which took a 29% stake in an earlier debt-for-equity swap, are unwilling to restructure their loans further until fresh equity is found.
Mallya blames that on government policy, which is now debating a proposal to allow foreign airlines to acquire up to a 49% stake in domestic airlines but for now bars foreign direct investment in Indian carriers.
“We have been requesting working capital from our consortium of bankers for a long time but the consortium of bankers took the view that the government policy was not favorable to the industry,” he said.
Lenders met recently to discuss a proposal from (SBI) Capital Markets, the investment banking arm of State Bank of India, to extend lines of credit to the beleaguered carrier.
“Whatever we have been seeing in the media in the last two days has only added fuel to fire,” said a senior official at state lender Bank of Baroda, which has loans of more than >5 billion rupees to (KFH).
“We want to recover our money but we need to figure out how,” added the official, who asked not to be named.
The government has resisted calls for it to rescue (KFH) and Mallya’s (UB) Group has said it won’t use its overseas alcohol assets to raise funds for the airline.
“There is a feeling that Vijay Mallya doesn’t want to invest his money in Kingfisher (KLFH),” said the senior pilot (FC). “Why else would someone as rich as him want to delay staff salaries for months? He only wants to raise money from the market, not invest his own money.”
(KFH) which is operating fewer than half of its fleet of 64 airplanes due to serious financial problems, will not be able to count on the Indian government for a monetary bailout, Civil Aviation Minister, Ajit Singh strongly stated.
According to "The Times of India," Singh said that (KFH) Founder & Chairman, Vijay Mallya "knows that Air India (AIN)/(IND) is a government concern" and therefore can receive government funds when in trouble, whereas (KFH) is privately held and "cannot" expect the same kind of assistance.
It will be up to India's banks to decide whether to rescue (KFH), he said. "The government is not going to interfere in it," Singh stated. "Banks have to decide on the basis of [KWH]'s business plan [whether to lend]. If they are satisfied with the business plan, they can lend money."
Later, (KFH) has received offers of funds from two Indian investors to help tide it over its cash crunch. Vijay Mallya said (KFH) was examining the offers, according to the "Economic Times," a leading Indian financial daily.
The chosen investor would pick up a 24% stake in (KFH) if a deal was reached, Mallya said, declining to identify the candidates. "They are large investors, and I would leave it there," he said.
The company owes suppliers, lenders and staff millions of dollars but Mallya said no agreement had yet been reached with (KFH)'s existing bank lenders on its requests for more funds.
(KFH) has scrapped scores of flights with only 28 of its fleet of 64 airplanes in operation. Many of its planes have been reclaimed by lessors or are awaiting spare parts.
(KFH), India's second-largest until earlier this year when its cash woes deepened, has blamed its latest problems on officials freezing its bank accounts for not paying tax arrears.
(KFH)'s net loss widened sharply to 4.44 billion rupees/$88 million in the three months to December from a loss of -2.54 billion rupees a year earlier. Its debt totals at least US$1.3 billion.
A consortium of banks led by state-run State Bank of India was expected to meet next week to discuss whether to extend fresh loans to (KFH), based on a new feasibility report, domestic media said. The banks already own about a quarter of (KFH) through an earlier debt-for-equity swap, and bankers have said they would like to see the airline get cash injections from other investors before they put in more money.
India's cabinet is next month expected to approve allowing foreign airlines to take up to a 49% stake in domestic carriers.
Analysts have mentioned (IAG), parent company of British Airways (BAB)/Iberia (IBE), and Etihad Airways (EHD), flagship carrier of the United Arab Emirates (UAE), as firm that might be interested in a Kingfisher (KFH) stake.
March 2012: Kingfisher Airlines (KFH), struggling for its survival, said that it is "curtailing" international flying. "We would like to confirm that we are curtailing our wide body overseas operations that are bleeding heavily," (KFH) spokesperson Prakash Mirpuri said. "To this end we have already returned one A330-200 to the lessor in the UK. Positive and immediate action is being taken on all fronts to cut costs."
(KFH) didn't give further details on which flights are being cut; in recent weeks it has been operating well below half its schedule. (KFH) operates A330s to Dubai, London Heathrow, Singapore, Hong Kong and Bangkok.
(KFH) was suspended from (IATA)'s global clearing house system last week owing to nonpayment of fees. Also, many of its unpaid employees, including pilots (FC), have been staying away from work.
"This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities," Mirpuri said. "We are making all possible efforts to remedy this temporary situation. We continue to work with the tax authorities to arrive at a solution to de-freeze our accounts as early as possible."
(KFH) reiterated that there is interest from foreign airline investors in taking a stake in the strapped carrier if India eases its restrictions on foreign airline investment. "There is a lot of sensational speculation and assumption about us," Mirpuri said. "We request one and all to appreciate the serious handicaps we face not only because of our frozen accounts but because of the [difficult] operating environment [for airlines in India]."
To overcome its airline industry's serious financial difficulties, India needs a more coherent aviation policy that creates conditions under which carriers can be more successful, according to (IATA) (ITA) Director General & (CEO), Tony Tyler.
Speaking at the India Aviation 2012 conference, Tyler mapped out India's civil aviation potential. "Let's do some simple math," he said. "If India’s 1.17 billion people traveled at the same frequency as do Americans, a market of 2.1 billion travelers would be created. But even if they only traveled one-third as much, India would have an air travel market of about 700 million - - rivaling that of the USA.
"There is no doubt that India is a market with big potential and that aviation could be a much more significant contributor to the Indian economy. But there are no guarantees that this will occur without well-coordinated policy measures."
He pointed to the "major hurdles" facing Indian carriers. "Air India (AIN)/(IND) (the national carrier) is being sustained on life support of state aid," Tyler said. "The difficulties at Kingfisher (KFH) are well known. And the sector as a whole is not generating the sustainable profits that one would expect from such a large high-growth market."
The Indian government could improve the country's airlines' prospects through several initiatives, he told the conference. For starters, taxes on airlines are too high, he asserted. "All [airplane] fuel [in India] is subject to an 8.24% excise duty," Tyler said. "Then domestic flights face state fuel taxes of up to 30%. The result is destroying the competitiveness of Indian airlines."
Second, he said, airport infrastructure needs to be modernized where necessary. "Where we see value and a clear return on investment, airlines are willing partners in developing infrastructure capabilities," he added. Third, airport charges should be lowered, he said.
Finally, Tyler pushed for India to end its restriction on investment in Indian carriers by foreign airlines. But he warned that "allowing foreign airlines to invest in Indian aviation is not a panacea [because under the current regulatory environment] the odds are stacked against any investor making a positive return on investment in the Indian aviation sector."
(KFH) has already revised its network plans again and will now suspend all international services including the Mumbai Chhatrapati Shivaji International airport (BOM) - Delhi Indira Gandhi International airport (DEL) route it had planned to retain by March 24. A variety of different airplanes are being returned and flown out of India by lessors on a daily basis and Indian Aviation Minister, Praful Patel has warned (KFH) that its license might soon be suspended unless it can provide a plan on how its operation can be financed in the short term.
Later, (KFH) has issued a revised summer timetable that sees its services to a number of major Indian cities (including Hyderabad, Ahmedabad, Kolkata and Lucknow) as "temporarily suspended".
It will now run around 120 daily flights with 20 dedicated airplanes.
(KFH), including its low-cost subsidiary, Kingfisher Red (DCC), previously operated 1,249 flights per week. This included 54 flights to Hyderabad, 26 to Lucknow, 20 to Ahmedabad and 14 to Kolkata.
(KFH) describes the latest revision to its timetable as a "holding plan" pending recapitalisation of the company and a "return to full utilisation of the airplane fleet".
(KFH) restates its intention to "bounce back as a major player in civil aviation" providing it can secure future funding. Intriguingly, despite previously having suspended international flights, the new timetable indicates that (KFH) will run a daily service between London Heathrow and New Delhi for a period of 17 days beginning 25 March.
Although dismissing the immediate threat of mass layoffs, (KFH) does not entirely rule this prospect out. It says: "To clarify, we are in a 'holding' pattern right now and are waiting for various decisions from the government and our consortium of bankers . . . All of these will have a major impact on the staffing decisions we will have to make."
(KFH) goes on to praise its staff, who it says have "remained incredibly dedicated and loyal" under difficult circumstances. "Our immediate priority is to access our funds to pay outstanding staff salaries." However, most staff at airports where services have been suspended, have been asked to stay at home.
Meanwhile, India's (ICICI) Bank has asked (KFH) to increase its loan security or pay back some of the capital. The bank has lent around Rs4.3 billion/$85 million to (KFH).
April 2012: Struggling Kingfisher Airlines (KFH) said it has moved into a “holding plan” in which it will operate only about 120 flights daily (around a quarter of its full schedule) while it awaits a much-needed recapitalization.
Meanwhile, Chairman, Vijay Mallya assured employees over the weekend that salaries will begin to be paid again shortly following a suspension in worker pay that extends back to December.
Mallya said that Indian tax authorities have unfrozen (KFH)’s bank accounts, allowing some payments to employees to begin this week. While there have been calls for the wealthy liquor baron to shut down the seven-year-old airline, which has never earned an annual profit, Mallya doubled down in a letter to workers quoted by "The Times of India."
“We have managed to keep the lights on in our days of darkness with adversity from every conceivable direction,” he told (KFH) employees, according to the newspaper. “I am personally passionate about and committed to your airline. Please stand by me. Let’s not become fodder for the media and competition to feed off.”
In a statement, (KFH) said, “Our keen intent is to get recapitalized and to bounce back as a major player in civil aviation.”
June 2012: Airlines in India have agreed to lower fares -5% to -20% after a reprimand by the Directorate General of Civil Aviation (DGCA), which called the average airfare “phenomenal.” The (DGCA) action was in response to a steady rise in air fares on domestic routes since the end of 2011.
According to (DGCA) Chief, E K Bharat Bhushan, who met with airline (CEO)s in Delhi, the (DGCA) has been under pressure to intervene on behalf of passengers. “The increase in average airfare offered by the airlines is phenomenal, though aviation turbine fuel prices have gone up only by +16% in the last one year,” the (DGCA) said.
Airlines have been advised to upload their revised tariff on their websites as soon as possible. The fare reductions will be on the highest fare categories, which are tickets typically sold very close to the date of departure. Most carriers typically sell more than half their inventory in advance.
Indian carriers have been able to command higher fares mainly because seat capacity in the market has come down after the struggling Kingfisher Airlines (KFH) substantially reduced its international flights. (KFH)’s fleet is down to 14 airplanes from 88 at its peak.
The Indian government requires airlines to periodically submit fare charts to the (DGCA), which the airlines are free to discount. Most have been charging a premium because demand has exceeded supply recently.
July 2012: Kingfisher Airlines (KFH) is facing more trouble as management failed to convince pilots (FC) they will be paid. The pilots (FC) went on strike over nonpayment of salaries since February.
Labor troubles are the latest woes for (KFH), which has a debt of close to $1.4 billion. (KFH) has responded to cash-flow problems by shrinking operations substantially. It operates between 13 and 15 of the 43 airplanes in its possession. About 23 airplanes have been sent back to lessors or repossessed over the past 12 months, according to sources in the airplane re-insurance business.
There has been no statement from (KFH) on its exact fleet status, but industry sources say it is now left with A320s, three A330-200s and ATR72s. Spares from the planes are being cannibalized to operate the remaining airplanes. The A330s have been a major drain on finances for about two years, as (KFH) has been unable to operate them profitably. Its share in India’s domestic market shrunk to 5% in May. Before the pilot (FC)’s strike, (KFH) was able to maintain a reduced schedule of about 100 flights a day, but more flights had to be cut July 3 because of the pilot (FC)’s strike.
(KFH) lenders, mostly government-owned banks, have formed a consortium to try and recover their money. The group will meet with Chairman, Vijay Mallya and (KFH)’s management July 5 to decide on the next course of action. In the last meeting, they pushed Mallya to bring in equity to revive (KFH). He has been pinning his hopes on the Indian government allowing foreign airlines to invest in Indian carriers. However, a decision allowing foreign airlines to take up to 49% equity has not yet been confirmed.
The banks have stopped lending to (KFH), putting (KFH) in a very precarious position. It has already been thrown out of (IATA)’s Billing & Settlement Plan and is defaulting on payments to virtually all major vendors. Mumbai airport operator (MIAL) has gone to court to recover its dues from (KFH). Other creditors say it is a matter of time before they do the same.
August 2012: Kingfisher Airlines (KFH) has reported increased losses of -INR6.51 billion/-$117 million for the April - June quarter on revenues that plummeted to INR3 billion compared to INR19 billion in the second quarter last year.
(KFH)’s losses for the same period a year ago were -INR2.63 billion.
(KFH) said that high fuel costs, high interest rates and expenses related to the return of airplanes to lessors as it cut capacity were the reasons for the loss.
(KFH), which has never made a profit, has debts close to $1.4 billion. Only about 14 of (KFH)'s fleet of 60 planes are operating.
(KFH)'s problems are compounded by a tough environment with high fuel costs and overcapacity. Indian carriers lost about -$2 billion in the financial year that ended March 2012 and have a combined debt load of $20 billion. Low cost carrier (LCC) IndiGo (GOZ) was the only airline to make money last year.
Airlines complain to the government that a sales tax of up to 30% makes fuel about +50% more expensive in India compared to the global average. In a speech in Delhi in July, (IATA) Director General, Tony Tyler attacked the Indian Airport regulator (AERA) for allowing a +346% rise in tariffs at Delhi airport.
Bankers have stopped lending to (KFH) and (KFH) is being supported by its Chairman, Vijay Mallya's liquor companies. The group provided cash support of more than >INR7.5 billion to allow (KFH) to meet its cash flow requirements. Mallya, a member of parliament, has been pinning his hopes on a foreign airline investing in (KFH), once the Indian government permits that. Current rules do not allow foreign carriers to take a stake in Indian carriers, although non-airline foreign investors are permitted.
"(KFH) is in discussions with several strategic and financial investors to bring in fresh capital."
(KFH)’s capacity cuts have helped other domestic carriers improve their margins. Fares have increased and (KFH)’s two rivals, Jet Airways (JPL) and SpiceJet (ROJ), have posted profits for the quarter after five consecutive loss-making quarters.
Arik Air (AKI) is about to take delivery of an ex-Kingfisher Airlines (KFH) A330-223 (891) currently being prepared for (AKI), the largest Nigerian carrier at Dublin International airport (DUB). (AKI) had previously operated an A330-200 that had then, however, been repossessed by its lessor due to a dispute over leasing fees. (AKI) currently uses two A340-541s (894, CS-TQL; 910, CS-TFW) wet-leased from long-time partner, HiFly (LXA) (IATA) Code: 5K, based at Lisbon Portela de Sacavem airport (LIS)) for its routes from Lagos to London Heathrow (LHR) and New York John F Kennedy International (JFK) airports.
September 2012: India has decided to allow foreign airlines to buy stakes of up to 49% in local carriers, a long-awaited policy move that could provide a lifeline to the country's debt-laden airlines by opening up a fresh source of funding.
The move, which comes with conditions, is a part of massive big-ticket reforms announced by India, including opening up its supermarket sector to foreign firms, as it seeks to revive economic growth and avoid a ratings downgrade.
Newly affluent Indians, with increasing disposable incomes, have started treating flying as a mode of transport rather than a luxury, providing a massive local market.
"It sends a clear message to the sector which was under financial stress - now even the banks would look at them favorably," Civil Aviation Minister, Ajit Singh said. The relaxed rules do come with some riders, said Singh.
Interested companies will have to get clearances from Foreign Investments Promotions Board and the Ministry, and three quarters of their directors have to be Indians. "They will have to follow all the rules like plane acquisition, and route disbursal laid down by the Ministry," Singh added.
The 49% limit includes both foreign direct investment and foreign institutional investment, according to a government document seen by "Reuters."
Ailing Kingfisher Airlines (KFH), which was India's No 2 local carrier a year ago but has since grounded most of its fleet, has lobbied hard for this move on hopes that it can attract a foreign airline investor, although none has publicly expressed interest.
(KFH), whose fortunes hang on its ability to raise funds soon, said the move will allow it to re-engage with prospective investors in a "more meaningful manner." "This will open up a wide range of opportunities for both Indian carriers and foreign carriers who wish to participate in the strong growth potential for civil aviation in our country," (KFH), controlled by liquor baron, Vijay Mallya, said.
With global airlines buffeted by the European debt crisis and high fuel costs, cash-rich and fast-growing Gulf carriers such as Dubai's Emirates (EAD), Qatar Airways (QTA) and Abu Dhabi's Etihad (EHD) are seen as the most likely buyers of stakes in Indian carriers, analysts say.
The Boeing Company (TBC) raised its forecast for the Indian plane market, saying the South Asian country would need 1,450 new airplanes worth $175 billion by 2031.
“Several” international carriers are contemplating a stake in Kingfisher Airlines (KFH)’s holding company UB Holdings, says Vijay Mallya, Chairman of the financially troubled operator, just days after the Indian government relaxed foreign ownership rules.
“We can’t go faster, as it is only 10 days ago the government announced the (FDI) [foreign direct investment] policy in the civil aviation sector,” says Mallya, noting the new policy that allows foreign airlines to own up to 49% of a domestic carrier.
No other details are being disclosed, although local media is speculating that Emirates Airline (EAD) are considering a stake in an Indian carrier. Emirates (EAD), however, has denied such rumors.
Mallay dismisses reports that Kingfisher (KFH) is operating just seven of its 40 airplanes, asserting that 15 airplanes are in operation and that “we are looking for recapitalization to put the remaining 25 airplanes back in air.”
The unprofitable carrier is currently in discussions with a consortium of banks to restructure some 80 billion rupees/$1.5 billion in debt, Mallya adds.
October 2012: Kingfisher Airlines (KFH)'s engineers (MT) went on strike over nonpayment of salaries. Four flights were canceled from Delhi and five others were delayed up to 30 minutes, according to Indian news agency "PTI." However, "Reuters" reported all flights were canceled due to safety issues and India’s Civil Aviation Ministry will meet with (KFH) executives.
The strike is the latest in a series of labor troubles for (KFH). In July, (KFH) pilots (FC), who had not been paid since February, went on strike. With the majority of its 65-airplane fleet grounded, the debt-laden airline has been operating on a curtailed schedule for about 10 months. (KFH) reported increased losses of -INR6.51 billion/-$117 million for the April - June quarter on revenues that plummeted to INR3 billion compared to INR19 billion in the second quarter last year.
In August, the government changed its policy allowing foreign airlines to invest up to 49% in Indian carriers. (KFH)'s lenders’ consortium, mostly Indian banks, has given (KFH) airline promoter, Vijay Mallya about four weeks to come up with a revival plan. It appointed (SBI) Capital Markets to work out a restructuring plan with Mallya.
It is still not clear which international airline would be interested in taking on the challenge. The Indian government has stopped giving operating licenses (AOC)s to new airlines until the industry gets into better shape. Any potential suitor must choose between the five privately owned carriers in the country. Low-cost carriers (LCC)s Go Air (GOZ) and SpiceJet (ROJ) are looking for investors.
Government-owned Air India (AIN)/(IND) is not open to foreign investors.
Speaking at (KFH)’s annual general meeting in Bangalore last month, Mallya said, “The airline is in talks with foreign carriers as well as domestic investors to sell a stake.” Three days later, Mallya, whose liquor business is under threat because of (KFH)’s nearly $2 billion debt, tweeted his resolve to work things out: “The media are having a great time slamming me. Let them continue their wild and inaccurate speculation. I will prove all of them wrong.”
Later, India’s Director General of Civil Aviation (DGCA) issued a show-cause notice to the cash-strapped Kingfisher Airlines (KFH), requiring it to demonstrate why it should keep its air operating certificate (AOC).
(KFH) recently stopped flying altogether when employees, who have not been paid for seven months, disrupted flights. The regulator has given the airline 15 days to come up with a plan or its license (AOC) could be temporarily suspended or canceled.
(KFH) VP Communications, Prakash Mirpuri confirmed (KFH) received the notice, saying (KFH) will send a “detailed response to the (DGCA) well in time. We will also submit a comprehensive plan for restoration of services after negotiations with our employees.”
(KFH) has been battling high debt and low revenues since its inception in 2006. (KFH), which at one time had the largest domestic market share, has been rapidly declining and is now the smallest Indian carrier.
(KFH) reported increased losses of -INR6.51 billion/-$117 million for the April - June quarter on revenues that plummeted to INR3 billion compared to INR19 billion in the second quarter last year. (KFH) has debts close to $1.4 billion.
India’s airline analysts say the regulator should have intervened much earlier. (KFH) has a fleet of about 42 airplanes, down from 66 a year ago.
Later, A Hyderabad, India, court issued a warrant for the arrest of Kingfisher Airlines (KFH) Chairman & Founder, Vijay Mallya and five other (KFH) executives for allegedly bouncing checks to the city’s airport operator.
Strapped (KFH) has been struggling to stay alive for months. Hyderabad International Airport (GMR) Manager claims (KFH) has bounced checks covering user fees and filed a court action to collect.
According to multiple reports from India, Mallya did not appear for the court case, prompting the issuance of the warrant, which has been described as “non-bailable.” Mallya, who made a fortune in the liquor business before entering aviation, is reportedly traveling outside the country.
"Finally" Kingfisher Airlines (IT) on Saturday, October 20 said it received an order from the Director General of Civil Aviation (DCGA) suspending its scheduled operator’s permit. Earlier this month, the (DGCA) issued a show-cause notice to the cash-strapped (KFH), requiring it to demonstrate why it should keep its air operating certificate (AOC) license. The regulator gave (KFH) 15 days to come up with a plan or warned its license could be temporarily suspended or canceled.
(KFH) stopped flying when employees, who have not been paid for seven months, disrupted flights. According to a company statement, (KFH) said: “We would like to clarify that this is not a cancellation but a temporary suspension, which is valid only till such time that we submit a concrete and reliable revival plan to the satisfaction of the (DGCA). While this order is being examined, we would like to bring to your notice that the actual position has not changed because of this order. We have in any case always maintained that once the issues with the employees are resolved, we will first present our resumption plan to the (DGCA) for review before resuming operations.”
On Friday October 19, (KFH) management had said they were extending the lockout until October 23 and were hopeful to resume operations November 6, if its plan was approved by the (DGCA). But the authorities have decided to take a tough stand and force (KFH) to come up with a concrete plan first. (KFH)’s management has been struggling to keep afloat, after being burdened with debt of close to $1.5 billion. At the time it stopped operating, only about 13 to 15 of (KFH)’s fleet of 66 planes were flying. Many of the planes have been repossessed by lessors and some are in maintenance at various airports.
On October 12, a Hyderabad, India, court issued a warrant for the arrest of (KFH)’s Chairman & Founder, Vijay Mallya and five other (KFH) executives for allegedly bouncing checks to the city’s airport operator.
“It is our endeavor to re-start operations at the earliest and we assure you we are working towards achieving this,” (KFH) said.
An October 25 news release, however, stated the following:
Staff at India’s Kingfisher (KFH) airline, whose fleet has been grounded since October 1, have agreed to end their strike over unpaid wages and return to work, (KFH)’s (CEO) said.
(KFH) airplanes will, however, be unable to return to the skies until it has persuaded Indian aviation regulators to reinstate its flying licence, which was suspended. “All employees have agreed to resume duty right now. They are on duty as we speak,” (CEO), Sanjay Aggarwal told reporters. “We are all in this together and looking forward to getting (KFH) going in the next few weeks.”
The truce with employees came before the start of the three-day Formula One Grand Prix near New Delhi, in which (KFH) Chairman, Vijay Mallya’s co-owned Force India Formula One team will compete. “I sincerely thank all (staff) for their faith and continuing commitment,” Mallya said on Twitter.
The striking staff (who include pilots (FC), engineers (MT) and ground staff) agreed to the management’s new offer under which they would receive at least four months’ worth of unpaid salaries by Christmas.
Most staff, totalling at least 4,000, had not been paid for more than six months, triggering the strike at the start of this month.
(KFH) has been one of India’s worst-hit airlines in an industry plagued by high jet fuel prices, fierce competition, price wars and shabby airport infrastructure. (KFH) was India’s second-largest airline until a year ago but now it has a market share of just 3.5%, the smallest of the country’s carriers.
“The management has shown magnanimity to resolve the issue,” Vikrant Patkar, a (KFH) pilot (FC) who led the employees’ protest said. “We shall defend (Kingfisher (KFH), whatever the cost may be. We will fight with other competitors.”
But Mallya is desperately seeking a foreign buyer to save his airline from complete collapse, and many analysts are doubtful any rescue is possible.
India’s aviation minister Ajit Singh said it would be “very difficult” for the ailing carrier to resume operations.
One pilot (FC), declining to be named, said: “We have got the first of our pending salaries, as promised. We just hope that there are no more stumbling blocks.”
(KFH) has announced that it has reached agreement with its employees over a payment plan for the overdue salary payments after apparently securing new funding from the UB Group owned by (KFH) Chairman, Vijay Mallya. Kingfisher Airlines (KFH) has agreed to pay salaries for three months immediately and to make a payment for a fourth monthly unpaid salary by the end of the year. (KFH) will now present a revival plan to the Indian civil aviation authority and hopes to resume operations once and if it is able to get its operating license (AOC) back. (KFH) has not flown since early October.
(KFH), which owes billions of dollars in taxes, airport fees and salaries, had its licence suspended until it could present a “viable” revival plan. Airline spokesman, Prakash Mirpuri said it would soon deliver a new business plan to the regulators.
(KFH) shares rose +4.81% to 10.9 rupees on the Bombay Stock Exchange, reacting to the end of the strike.
A report by the Center for Asia Pacific Aviation (CAPA), a Sydney-based consultancy, has said (KFH)’s promoters need to raise at least $600 million to stay in operation. (KFH)’s debts total $2.49 billion including bank debts of $1.1 billion, and it had accumulated losses of $1.9 billion, (CAPA) said.
November 2012: Kingfisher Airlines (KFH) is now facing two road blocks in the form of deadlines on its path to a resumption of flight operations. Its lenders lead by the State Bank of India have given it until the end of the month to either present a new investor or equity from its current shareholders. The Directorate General of Civil Aviation has meanwhile asked Kingfisher Airlines (KFH)'s management to present a turnaround plan by the end of the year. If it does not comply, (KFH)’s suspended air operating license (AOC) will expire and it would have to apply for a new air operator certificate (AOC) should it be able to resume operations at a later stage. (KFH) has no longer operated any scheduled flights since early October.
December 2012: India’s airline passenger traffic has fallen about -16% in October compared to a year ago, according to the Directorate of Civil Aviation.
The decline marks the sixth straight month of falling traffic despite capacity remaining largely flat. India's air travel numbers had registered double-digit growth over the past several years. October data shows airlines flew 4.5 million passengers compared to 5.4 million in the year-ago month.
Analysts say the slowdown is largely because of higher fares and slowing economic growth. India’s gross domestic product (GDP) growth, the primary measure of economic health, declined to 5.4% in the April to September period, compared to the 7.3% reported in the same period last year, according to data released by the Central Statistical Organization. Many air passengers are making fewer trips or taking the train, travel agents in Mumbai said.
Airline executives say they expect demand to pick up over the next two months, as the peak holiday season kicks in. They have been reporting lower load factors, although fares remain high. Most airlines are beginning the slow journey back to profitability.
Competition in the Indian skies has fallen following the government’s suspension of Kingfisher Airlines (KFH)’s license in October, after the cash-strapped airline was unable to pay employees or maintain a schedule. The airline management, led by liquor baron, Vijay Mallya, had hoped to revive operations by November, but has not been able to do so.
Mumbai airport operator Mumbai International Airport Limited (MIAL) has issued (KFH) an eviction notice, in another step that marks the winding down of (KFH). A consortium of 17 bankers that have lent money to Kingfisher Airlines (KFH) is meeting in Mumbai to decide the next course of action.
Kingfisher Airlines (KFH) has confirmed it is in discussions with several investors, including Etihad Airways (EHD), to take an equity stake in the troubled Indian carrier. The comment came in a statement to the Mumbai Stock Exchange.
(KFH) has not operated flights since October 19, when Indian regulatory authorities suspended its license. Debt-burdened (KFH) has faced severe financial problems this year and stopped flying when its employees, who had not been paid for seven months, disrupted flights. This statement followed reports in India’s "Mumbai Mirror" newspaper that Etihad (EHD) had struck a deal to buy 48% of (KFH) for roughly INR30 billion/$551 million.
A statement on the stock exchange website said (KFH) has “clarified” that “the company is in discussion with various investors, including Etihad Airways (EHD), for equity investments in the company.
“However, no agreement has been reached, neither with (EHD) nor any other airline, and the matters are merely in negotiation stages.”
“We’re not commenting on any of these reports,” (EHD) spokesman Tom Clarke said. He acknowledged, however, that (EHD) President & (CEO), James Hogan had said on "Bloomberg TV" a week ago that (EHD) was in negotiations with unspecified Indian airlines. In his "Bloomberg" interview, Hogan said (EHD) had always made it clear it was very keen in taking equity stakes in Indian carriers, given the booming market in the country.
Later, it was revealed that Etihad Airways ((EHD) is close to buying a 48% stake in (KFH) for a little over >30 billion rupees, the "Mumbai Mirror" reported.
A formal announcement of the deal could come around December 18, the birthday of Kingfisher (KFH)’s flamboyant Chairman, Vijay Mallya, the newspaper said, without saying how it got the information.
(KFH), whose planes have been grounded for the past two months, declined to comment on the report. (EHD) did not immediately respond to an email sent by "Reuters."
(EHD) will initially buy a 30% holding in December and a further 18% by next August, the paper said, adding (EHD) and (KFH) refused to deny or confirm the stake sale.
Battling stiff competition and high operating costs, Indian carriers have been in talks to sell minority stakes to foreign investors. (EHD) was reported to be eyeing buying a stake in Jet Airways (JPL), India’s largest airline by total passengers carried.
(KFH), which Mallya launched with much fanfare in 2005, was once India’s second-largest airline by domestic market share. For most of this year, (KFH) has struggled to pay its staff and has not flown since early October due to protests and safety concerns.
According to one estimate, (KFH) is saddled with roughly $2.5 billion in debt. (KFH) shares were up +4.7% in early trade.
January 2013: Kingfisher Airlines (KFH)’s operators permit expired December 31 after management failed to come up with a firm revival plan. The permit, which is granted by the Director General of Civil Aviation (DGCA), can be renewed within two years if the airline comes up with a credible plan.
Speaking to journalists in Delhi, Indian Civil Aviation Minister, Ajit Singh said no bank was willing to lend funds to (KFH), which has a debt of about $1.5 billion and accumulated losses of around $2 billion.
(KFH) suspended flights in October after more than a year of financial difficulty, which culminated in a strike by employees.
Last year, the government amended laws to allow foreign airlines to take up to 49% equity in India’s carriers. In early December, stock markets in India were abuzz with rumors that Abu Dhabi-based Etihad Airways (EHD) may take up an equity stake in (KFH). However, no such agreement has been made.
Airline analysts say the airline would need close to $200 million to relaunch. Dues to employees, oil companies, airports and airplane leasing companies have piled up. Leasing companies, including International Lease Finance Corporation (ILFC), are struggling to get their planes back from (KFH). Germany’s (DVP) Bank (SE), which funded the airplane purchase, has sued the (DGCA), asking for the two airplanes it financed, to be de-registered as the first step toward recouping its money.
Kingfisher Airlines (KFH)’s revival plans got tougher following an Indian Service Tax Department notice that it will impound all its airplanes, "PTI" news agency said. According to the notice, the airplanes cannot be flown outside the airports where they are already parked. (KFH) owes INR1.9 billion/$34.6 million to the service tax department, of which about INR1.27 billion is under litigation. It has enlisted the help of Customs to lay claim over the airplanes.
Earlier in the day, (KFH) Founder, Vijay Mallya had re-ignited hope for some employees in an email saying (KFH) would restart flying this summer. “The limited restart plan, which we target for the beginning of the 2013 summer schedule, requires funding of approximately INR6.5 billion, which is committed to be provided by the (UB) Group and associates,” he said in the January 10 email.
Mallya’s latest communication to employees is the first since August. Employees have been discontent for more than a year, as most have not been paid since June. Mallya made it clear that despite discussion with strategic and financial investors, no deal had been made yet. He said, “Investors need to be convinced about the long-term prospects of their proposed investment in Kingfisher (KFH) and this takes time. Please rest assured that we are in discussion with multiple investors and remain confident that we will secure a deal.” He warned that the “aviation industry in India is a seriously complex one, including high costs resulting from excessive taxation and monopolies.”
Kingfisher (KFH)’s air operating certificate (AOC) expired on December 31 after management failed to come up with a firm revival plan.
Meanwhile, the big airport companies at Mumbai and Delhi have started giving away Kingfisher (KFH)’s slots to other carriers. (KFH) also owes money to the Airport Authority of India.
February 2013: Struggling Kingfisher Airlines (KFH)'s hopes of making a phased restart were dashed further after India’s government decided to withdraw (KFH)’s international route authority and domestic slots and allot them to other Indian carriers.
“These traffic rights have been withdrawn with immediate effect on account of non-utilization by the airline,” said an official at India’s Civil Aviation Ministry.
State-run Airports Authority of India (AAI) on February 25 was directed by the government to assign Kingfisher (KFH)’s slots and foreign flying rights to other domestic operators “as per their demand,” the official adds.
In its latest announcement, the (AAI) offers “additional availability of approximately 25,000 seats per week” to eight countries for use by other Indian carriers, according to the ministry official.
The major beneficiaries likely will be national airline, Air India (AIN)/(IND) Ltd and subsidiary Air India Express (AEX), and private carriers IndiGo (IGO), Jet Airways (JPL) and subsidiary JetKonnect (SAQ), and SpiceJet (ROJ).
The traffic rights were allocated to Kingfisher (KFH) between 2008 and 2011. During that period, (KFH) operated 14 weekly flights to Bangladesh and Hong Kong; seven to Nepal, Singapore and the UK; 35 to Sri Lanka, and 21 to Thailand and the (UAE).
Private airports, such as those in Delhi and Mumbai, already have started giving slots held by (KFH) to other airlines.
The withdrawal of traffic rights seems to be the final one in a series of moves to ensure that Kingfisher (KFH) will not fly again, say aviation analysts.
March 2013: Kingfisher Airlines (KFH) inched another step closer to bankruptcy. India’s Supreme Court rejected a plea by (KFH)’s billion-dollar man, Vijay Mallya, against a lower court decision ordering the dying airline to pay 1.85 billion rupees/185 crore in back wages and taxes.
Supreme Court Justice R M Lodha rejected (KFH)’s lawyers’ plea to give the grounded airline three more weeks to come up with the money. (KFH) has been grounded now for a year. Rumors that a white knight airline, Eithad Airways (EHD) was going to buy out the company have been unfounded. (EHD) is not negotiating with the airline.
Meanwhile, (KFH) is hanging like a loose tooth.
Mallya may very well be one of the most beloved and popular billionaire businessmen in India, but his status has done nothing to help keep (KFH) solvent. (KFH) is named after his flagship beer brand in his United Breweries Group holding company, one of the biggest beverage companies in the world and the source of Mallya’s wealth.
Lenders to (KFH) have indicated they may sell the shares in UB Group’s United Spirits that they were pledged by (KFH) as collateral, and that they would do so either in the market or at a higher price to outsiders. If so, that would potential deal a serious blow to the proposed takeover of United Spirits by British liquor company Diageo, which sought to buy out the firm from UB Group last year.
Lenders told "The Economic Times" (ET) that they have lost faith in Mallya’s ability to salvage anything from the wreckage that has become of this poor airline. They no longer believe in a turnaround.
“We are open to selling the shares to anyone who gives us the best price,” a senior official with one of the banks told the (ET).
2% of United Spirits shares were given as collateral to the State Bank of India-led consortium a few years ago when (KFH) borrowed money to continue operations. (KFH) has been in default for over a year. Mallya has been unable to come up with a satisfactory revival plan and so banks have refused additional funding or loan extensions.
The (KFH) death watch continues here at Forbes in New York. Stay tuned.
August 2013: Kingfisher Airlines (KFH) has turned in a net loss of -Indian Rupee (Rs) 11.5 billion/-$189 million for the first quarter. Its unaudited results for the three months to June 20th do not list any figure for operational income. Owing to the "temporary" suspension of its air operator's permit, (KFH) states it "did not have any operations during the quarter." (KFH) added that it is "exploring various options to recapitalize and resume operations" and as a result, has prepared its financial results on a going-concern basis. But in a limited review report, the company's Chartered Accountant points out that the company's net worth is "completely eroded," its air operators certificate (AOC) has "lapsed" and banks have called in debts.
September 2013: Vijay Mallya, the promoter of bankrupt Indian carrier Kingfisher Airlines (KFH) says he is negotiating with a foreign investor to restart the airline. Speaking to the press after (KFH)’s Annual General Meeting in Bangalore, Mallya said he is in talks to get funds for a re-start and may conclude the discussions within 90 days.
November 2015: "Kingfisher Airlines (KFH)'s Assets Are To Be Auctioned Off" by (ATW) Jeremy Torr, November 24, 2015.
Bankrupt Indian low-cost carrier (LCC), Kingfisher Airlines (KFH) will see the last of its moveable assets be sold at a public auction in early December.
The Director General of Civil Aviation (DGCA) suspended (KFH)’s air operator’s certificate (AOC) in October 2012 after it stopped flying when employees, who had not been paid for seven months, disrupted flights. (KFH)’s de-registered aircraft were returned to lessors in March 2013. An order for five Airbus A350s and five A380s was also canceled.
The State Bank of India (SBI) has won a case to seize and sell a range of the former airline’s ground handling machinery, cranes and vehicles as part payment for outstanding debts of more than >$1 billion incurred before it ceased operations.
The auction follows the (SBI)’s repossession of Kingfisher (KFH)’s $15 million Mumbai Airport head office earlier this year.
Adding to (KFH) (CEO), Vijay Mallya’s troubles, (SBI) also claims to have won a case to brand him a “willful defaulter” on the loans that were extended to the airline by (SBI) and an associated group of 17 other banks.
“We have sent a notice [of willful default] to Kingfisher (KFH),” (SBI) Chairman, Arundhati Bhattacharya said. The notice means that Mallya, and his original company United Breweries, will be liable for the loans taken out in 2010 in a bid to rescue the financially troubled carrier.
At its peak, (KFH) had a 23% share of the Indian aviation market, with over >60 aircraft flying to 25 destinations, but ceased operations in early 2013 after seven years of operating without significant profits.
Click below for photos:
KFH-A320 - 2013-01
0 727-44 (JT8D-9A HK) (348-19318, /66 N727VJ "SIDHARTHA/LEANA/TANYA"), (GEF) LSD 2002-10. RTND. EXEC.
29 ORDERS (2012-02) A319/A320 (V2500):
3 A319-131 (V2522-A5) (2621, /05 VT-KFH; 2634, /05 VT-KFI; 2664, /06 VT-KFJ), (SIL) LSD, 144Y.
1 A319-133CJ (V2527M-A5) (2650, /06 VT-VJM), VIP. 25F.
4 A320-200 (CFM56), (GEF) LSD, 174Y.
4 +6 OPTIONS A320-232 (V2527-A5) (2413, /05 VT-KFA; 2443, /05 VT-KFB; 2496, /05 VT-KFC; 2502, /05 VT-KFD), (DEA) LSD. 20F, 138Y.
10 A320-232 (V2527-A5) (2522, /05 VT-KFE; 2531, /05 VT-KFF; 2576, /05 VT-KFG; 2817, /06 VT-KFL; 2856, /06 VT-KFM; 3543, VT-DNT, 2008-12; 4484; 4488). 3524; 3543; LST (MND) 2008-12 AS (PK-RML; & PK-RMK). 2531 RTT (SMBC) 2012-07. 174Y.
0 A320-232 (V2527-A5) (2645, VT-DKV), RTT (ALE) 2012-07.
1 A320-232 (V2527-A5) (2670, /06 VT-KFK), (BBB) LSD. 20F, 114Y.
3 A320-232 (V2527-A5) (3089, /07 VT-KFT; 3105, /07 VT-KFU; 3270, /07 VT-KFX), (ILF) LSD. 174Y.
4 A321-231 (V2533-A5) (2916, /06 VT-KFN; 2919, /06 VT-KFP; 2927, /06 VT-KFH; 2933, /06 VT-KFR). 32F, 119Y.
2 A321-232 (3034, VT-KFS, 2007-03; 3120, VT-KFV, 2007-05). 199Y.
2 A321-232 (3302, VT-KFY, 2007-11; 3322, VT-KFZ, 2007-11), (ILF) LSD. 20F, 158Y.
3 A330-223 (PW4168A) (874, /08 VT-VJK; 891; 927, VT-VJN; 939, /08 VT-VJO; 946, /08 VT-VJP), 2008-08. 891; TO (AKI) 2012-08. 30F, 187Y.
3/5 ORDERS A340-541 (TRENT 553), 2 ST (AKI) - - SEE ATTACHED "FLIGHT" ARTICLE - - "KFH-AKI-A340-500-2008-09:"
15 ORDERS (2014-02) A350 AWB-800 (TRENT AWB):
10 ORDERS A380, 496 PAX:
2 ATR42-500 (PW127E) (612, /00 VT-ATG; 613, /01 VT-ADK), 48Y.
25 +10/20 ORDERS ATR72-500 (PW127F) (699, /06 VT-KAA; 723, /06 VT-DKE; 728, /06 VT-KAB; 737, /06 VT-KAE; 738, /06 VT-KAF; 743, /07 VT-KAG; 746, /07 VT-KAH; 750, /07 VT-KAI; 754, /07 VT-KAJ; 758, /07 VT-KAK; 759, /07 VT-KAL; 762, /07 VT-KAM; 767, /07 VT-KAN; 772, /07 VT-KAO; 776, /08 VT-KAP; 777, /08 VT-KAQ; 782, /08 VT-KAR; 786, /08 VT-KAS), 72Y.
0 GULFSTREAM GIIB (Spey 511-8) (207, /77 VP-CUB "SIDHARTA"), WET-LSD. RTND. EXEC.
1 HAWKER F400B (HS 125-F400B) (TFE731-3R-1H) (25254, /71 VT-UBG), EXEC.
Click below for photos:
KFH-1 DR VIJAY MALLYA CHMN
KFH-1 DR VIJAY MALLYA CHMN 2007-03
KFH-1 DR VIJAY MALLYA CHMN-A
KFH-DR VIJAY MALLYA CEO 2007-10
DR VIJAY MALLYA, CHAIRMAN UB GROUP & MANAGING DIRECTOR (KFH) & (DCC).
SANJAY AGGARWAL, CHIEF EXECUTIVE OFFICER (CEO), EX-(ROJ) (2010-09).
RAVI NEDUNGADI, PRESIDENT & CHIEF FINANCIAL OFFICER (CFO), PARENT, UB GROUP.
G R GOPINATH, VICE CHAIRMAN.
ALEX WILCOX, PRESIDENT, EX-(JBL), (2004-12).
NIGEL HARWOOD, CHIEF OPERATING OFFICER (COO), EX-AIRBUS (EDS) (2005-08).
AMIT AGARWAL, SENIOR VP CO0RPORATE DEVELOPMENT & PLANNING (2010-02).
HITESH PATEL, VP MAINTENANCE ENGINEERING, EX-(JBL).
PRAKASH MIRPURI, VP COMMUNICATIONS.
SIVA "RAMA" RAMACHANDRAN, VP GLOBAL SALES (MUMBAI), EX-(QTA).
SANJAY BAHADUR, HEAD OF CORPORATE AFFAIRS (email@example.com).