India’s cash-strapped Kingfisher Airlines will have a full recovery plan in place in 2-3 days that will address its financial issues and restore dozens of flights, its chairman said on Thursday.
Kingfisher, controlled by flamboyant drinks baron Vijay Mallya, has almost halved its daily flights from the scheduled 200 after several pilots refused to report to work and a suspension by global industry body IATA from its settlement system restricted bookings through overseas agents.
The carrier, which has debt of USD$1.3 billion, is facing near collapse as banks have so far refused to lend it more for day-to-day operation and massive cutback in flights have reduced revenues, leaving the carrier with little cash to pay its employees, airports and tax authorities.
“In 2-3 days time you’ll hear the full plan,” Mallya said on a query on financial restructuring of the company at a press conference after he met about 80 pilots to assuage their fears on delayed salaries. Scores of pilots have resigned from Kingfisher in the past six months.
“I have their (pilots) assurances that certainty of the schedule will be maintained,” Mallya said, without elaborating on when pilots’ salaries will be paid.
One foreign airline and two non-airline foreign investors are interested in buying stake in the Indian carrier, Mallya said. The Indian government is considering allowing foreign airlines to buy stake in Indian carriers and a decision could be announced soon.
Kingfisher needs at least USD$500 million immediately to keep flying and USD$800 million to return to full operations, according to the Centre for Asia-Pacific Aviation (CAPA), an industry consultancy.
Kingfisher’s troubles have become representative of India’s airline industry that is struggling with high fuel costs, cut-throat competition and low fares.
Five of India’s six airlines are in the red and all local carriers together are likely to lose USD$2.5 billion in the fiscal year ending March, according to CAPA.