Kingfisher reworks plane purchase plan

Vijay Mallya’s Kingfisher Airlines has decided to change its earlier fleet acquisition plan. Though it aims to more than double the size from 66 to 137 aircraft by 2015-16, it does not now plan to induct Airbus 380s. The airline also does not plan to add Airbus 350s.

In the next financial year, Kingfisher plans to add nine aircraft — six A320s, two A330s and one ATR. Of these, the airline will take eight directly from the market. It plans to add 14 aircraft in 2012-13, 20 in 2013-14, 16 in 2014-15 and 13 in 2015-16.

When asked about the new delivery schedule of A380s, an airline spokesperson refused to talk on the issue. An email to the airline did not elicit any response.

Kingfisher is the second-largest airline in India in terms of passengers carried and operates around 375 flights a day to 71 destinations in India and abroad. It is also the only listed carrier to have not turned profitable; it reported a net loss of Rs 1,647.2 crore in the financial year ended March 2009. It reported a net loss of Rs 187 crore in the first quarter of this year and Rs 230 crore in the second quarter.

Taking steps to reduce costs and generate revenue, it has discontinued free food on Kingfisher Red, its low-cost operation, which accounts for up to 75 per cent of its capacity.

Kingfisher also expects to phase out its 100-odd expatriate pilots in 2011-12 and 2012-13. It also plans to induct aircraft only on operating leases and outsource all big maintenance contracts.

Kingfisher recently restructured its debt of over Rs 7,000 crore. The restructuring included converting about 30 per cent of total bank debt into capital and converting a loan of Rs 735 crore from UB Holdings, the parent company, into equity.

The debt restructuring exercise included Rs 900 crore of additional facilities by banks. The airline also plans to raise about $1 billion, including $250 million from global depositary receipts.