Jan. 11 (Bloomberg) -- Kingfisher Airlines Ltd.’s revival plan was rejected by the Indian government, setting back the company’s efforts to restart operations after it grounded flights following five years of losses.
The 6.5 billion rupees ($119 million) that parent UB Group pledged to provide Kingfisher isn’t adequate to ensure reliable services, an official at the Civil Aviation Ministry said in New Delhi today. The plan submitted to the regulator doesn’t provide for payments of money owed to airports, said the official, who asked not to be identified, citing government rules.
Kingfisher, the only Indian carrier to order Airbus SAS superjumbos, aims to restart operations this year with seven aircraft, Chairman Vijay Mallya said in an e-mail to employees yesterday. The airline, which lost its license on Jan. 1, has been talking to investors such as Etihad Airways PJSC.
Kingfisher gained 0.6 percent to 14.79 rupees at 12:15 p.m. in Mumbai trading, after rising as much as 9.9 percent. The stock fell 29 percent last year and slumped 68 percent in 2011.
The Bangalore, India-based carrier also defaulted on payments to fuel suppliers, creditors and airports as losses widened amid rising fuel costs and price competition. Kingfisher, which was No. 2 in India by market share in 2011, has debt of 85 billion rupees.
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