Kingfisher to use own funds in bid to resume service

DGCA worried about airlines financials

Debt-stricken Kingfisher Airlines, whose licence was suspended last week for flight disruption and strike by employees, failed to submit a credible revival plan to the aviation regulator on Friday, but said it will use its own resources to fund its revival.

Kingfisher CEO Sanjay Aggarwal, who met the Directorate General of Civil Aviation (DGCA) chief Arun Mishra, said the airline will soon present a revival plan to the regulator to help it revoke the licence suspension and resume flying. He, however, did not give any timeframe.

When DGCA expressed concern about the airline’s financial health as it was not going to get any money from its lenders, Kingfisher officials informed the regulator that they would be arranging funds for operations through internal resources.

Once among India’s top-ranked airlines, Kingfisher has failed in its attempt to find an investor, who can infuse the much-needed capital to help bring its fortunes back.

A government official said, Kingfisher promoter Vijay Mallya-led UB Group will invest in Kingfisher to help revive its operations. The official also said that the carrier must prove it has adequate funds to pay airports, fuel suppliers and other vendors before the license suspension can be revoked.

The DGCA has also said Kingfisher would need approval for a revival plan from, among others, oil companies and airport operators, who all stand to lose a large chunk of their money, if the beleaguered airlines fails in its bid to revive its good old days.

It has been shelling out an average of about Rs 20 crore a month on payment of salaries to about 4,000 employees.

The airline’s top brass are likely to discuss the revival plan with Mallya very soon, officials said. The DGCA also asked the airline to prepare and submit its winter schedule, taking into account the number of aircraft it had in its fleet.

The carrier, which last year had a fleet of 66 aircraft, is now left with only 10. Before the airline was grounded on September 30, Kingfisher had 10 operational aircraft — seven Airbus A-320s and three ATR turboprops, and is likely to get one more soon after it completes the mandatory and elaborate ‘C-checks’.

Meanwhile, analysts said raising fund remains the moot question for the airline, whose total debt is estimated at about Rs 23,000 crore. The airline owes over Rs 7,000 crore to Indian banks. The State Bank of India, the lead banker in the consortium, has over Rs 1,500 crore of exposure to the company.