Kingfisher Airlines will turn around soon: Mallya
Published on Tuesday, September 23rd, 2008 at 9:29 AMAuthor: admin (5507 Articles)
Kingfisher Airlines is expected to turn profitable by FY10 even as it has applied for a licence to import aviation fuel for its domestic operations.
UB Group’s chairman, Mr Vijay Mallya, told newspersons here on Monday on the sidelines of the annual general meeting of McDowell Holdings and Mangalore Chemicals & Fertilisers that he expects the airline to start performing well from the next quarter itself. “You will be surprised with the next quarter results itself. We hope to turn profitable by FY10 if ATF prices remain the same,†he said.
Mr Mallya said the airline has applied for a licence with the Directorate General of Foreign Trade (DGFT) to import ATF for its domestic operations. “If we get that, we will turn profitable sooner,†he said.
If the directorate agrees to the airline’s request, it will save the airline at least 25 per cent in fuel bill and about 10 per cent in operating cost. Mr Mallya said heavy taxation was killing the domestic airline industry. “Hopefully, the government will announce measures during the next Budget to lower various taxes on ATF,†he said.
Employees
Mr Mallya confirmed that the airline had allowed 300 employees to leave the company and they had been given two months’ salary for every work year as compensation apart from other benefits. He said this was part of a restructuring of the organisation post merger of the airline with Deccan Aviation.
He said the airline has deferred buying at least 20 Airbus aircraft to 2010, 2011 and 2012 from 2008. He pointed out that his airline had the lowest cost of operations. He said unlike some of the other airlines, Kingfisher Airlines was not a legacy carrier. “Therefore, my costs are much lower because we have outsourced a whole lot of operations,†he said.
He said synergies between the erstwhile Deccan Aviation as well as Kingfisher Airlines had led to savings of about Rs 300 crore. He said no timelines had been set for raising $400 million through equity for the airline. “We are in no hurry and there are no deadlines,†he said. He denied that US-based investor, Wilbur Ross, had approached him for buying a stake in SpiceJet.
naphtha to gas
On the issue of Mangalore Chemicals & Fertilisers converting from naptha to gas before 2010, Mr Mallya said it will cost about Rs 45 crore to carry out this exercise. But, he said, no decision has been taken on which company will provide them the gas.
Taken from Business Line
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