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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.


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.



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