Kingfisher Airlines delayed
Don't crane your neck; it will be another six
months before we spot the first Kingfisher
Funliner in the sky. The launch is delayed.
Competition is hotting up in the budget airline
space. But Vijay Mallya still has cause for cheer.
BY JM
22 Oct. 2004: Vijay Mallya does not know
if he should laugh or cry. One the one hand, the
UB group chief's dream baby Kingfisher Airlines
will take longer to take wings. On the other, he
just got the freedom to get more foreign funds for
Kingfisher Airlines. That's business.
UB group's flag carrier Kingfisher Airlines was
supposed to take off early 2005. Vijay Mallya
gladly called press meets when the aircraft deal
was struck and the procedures to take wings
started. very recently, the company also floated a
website as a prelude to the real launch. But the
actual takeoff for Kingfisher Airlines will not
come before April 2005; probably later. It turns
out that the 16 planes which wee supposed to form
the Kingfisher Airlines fleet will be fully in
place only by 2006.
The original Kingfisher Airlines plan was to lease
four Airbus A-320s from GE Capital Aviation
Services (GECAS) to start operations from January
15. That seems to have tanked. Kingfisher will now
get all new aircraft and start in April 2005.
Vijay Mallya told media that the delay was worth
it. May be. Kingfisher Air is now planning to get
4 birds on lease from Debis Finance. The first is
expected to land in April. After this, each month,
a leased aircraft will arrive till July.
Kingfisher Airlines now plans to buy four Airbus
A-320s during August-November 2005 and bring eight
more Airbus aircraft during 2006. That will add up
to a total of the initially-promised 16.
All "Funliners" as Mallya lovingly calls
his birds, will carry 180 passengers in a
single-class layout. Meanwhile, the airline is to
double its paid-up capital from the existing Rs 30
crore to Rs 60 crore by November this year and to
Rs 100 crore by December this year.
A day after airlines hiked fares by 10% across the
board citing rising Aviation Turbine Fuel prices,
upstart Air Deccan queered the pitch with a
further fare cut. Mallya has more trouble on his
hands.
What gladdened him must have been a Cabinet
decision on Wednesday, October 20, which hiked the
permitted foreign direct investment (FDI) limit in
domestic airlines to 49% from the current 40%.
This move is expected to help fledgling airlines
like Kingfisher and Air Deccan. Jet and Sahara
lobbied till the last, Left tried to muddy the
waters, but the skies were opening up and Mallya
had cause for cheer. The bogey of national
security concerns raised by the Jet-Sahara cartel
failed. More than the 9% hike, the decision also
signalled to domestic airlines and foreign
investors that the government was serious on
aviation reform, Left or no Left.
Currently, Kingfisher Airlines is awaiting Home
Ministry's security clearance to be eligible for a
scheduled operators' permit. The issuance of the
license will follow.
BY JM
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