Kingfisher may cancel A380 and A350 orders

The delivery of these planes was to start from 2014.

The UB Group-controlled Kingfisher Airlines may cancel its orders for Airbus A380s and A350s or swap these planes for smaller planes like A320s and A330s.

“We are reviewing our purchase plan of A380s and A350s. With our airline joining the Oneworld Alliance, we do not need these ultra long-haul aircraft any more. However, we have not started any negotiations with Airbus now,” said Kingfisher Chief Executive Officer Sanjay Aggarwal.

In 2005, Kingfisher became the only Indian airline to have ordered five A380s, but has deferred its deliveries once. These jumbos were to scheduled to join the airline in 2011 but were deferred till 2014.

The airline also ordered five A350s ultra long-haul aircraft in 2005 and the deliveries of these aircraft were to start from 2015.

Kingfisher is set to get global presence by joining the Oneworld Alliance by the end of 2011. This entry will give the airline a network of 11 airlines in its fold, covering 870 destinations across 146 countries and over 9,300 daily flights. The alliance also carries 335 million passengers on a combined fleet of over 2,400 aircraft.

Kingfisher Airlines has also chalked out a plan of doubling is fleet size from 66 to 137 aircraft by 2015-16. In the next financial year, Kingfisher plans to add a total nine airplanes – six A320s, two A330s and one ATR aircraft. Out of the nine aircraft, the airline will take eight aircraft directly from the market. The airline will add 14 aircraft in 2012-13, 20 in 2013-14, 16 in 2014-15 and 13 in 2015-16.

Currently, Kingfisher operates around 375 flights a day to 71 destinations in India and abroad and is looking at expanding its domestic network.

The airline is also the only listed carrier to have not turned profitable and reported a net loss of Rs 1,647.2 crore in the financial year ended March 2009. In the current financial year, it has reported losses of Rs 187 crore in the first quarter, Rs 230 crore in the second quarter and Rs 254 crore in the third quarter, though the performance was better as compared to the previous quarter.

Meanwhile, the carrier is also taking various steps to reduce costs and generate revenue. The airline has introduced Food for Purchase on their low-cost operations Kingfisher Red, which constitutes up to 75 per cent of their capacity.

Kingfisher also expects to phase out expat pilots evenly in 2011-12 and 2012-13. At present, the airline has around 100 expat pilots flying for them.

With approval from banks, Kingfisher Airlines recently restructured its debt of over Rs 7,000 crore. The restructuring package include converting about 30 per cent of the total debt by banks into capital and converting a loan of Rs 735 crore from parent company UB Holdings to the airline into equity.

The debt restructuring exercise also calls for Rs 900 crore of additional facilities to be provided by banks to the airline and plans to raise funds of about $1 billion, including a $250-million GDR issue.