Kingfisher Air Revival Needs $186 Million, Minister Says
Kingfisher Airlines Ltd. (KAIR), the Indian carrier that stopped flying in October because of a cash crunch, needs at least 10 billion rupees ($186 million) to restart operations, Civil Aviation Minister Ajit Singh said.
“They need to prove they’ve the ability to scale up funds to sustain operations,” Singh told reporters in New Delhi today. Kingfisher Airlines also needs to obtain statements from creditors, including banks, airport operators and employees that they don’t object to a resumption of flights, he said.
Singh’s estimate on funds required by Kingfisher exceeds a 6.5 billion-rupee recovery plan that Chairman Vijay Mallya, a founder of the airline, outlined to employees on Jan. 10. The Bangalore-based carrier, which lost its operating license on Jan. 1, has sought cash for more than two years and was in talks with possible investors such as Abu Dhabi-based Etihad Airways PJSC for its revival.
India’s government is willing to support Kingfisher’s efforts to restart business provided the carrier pays employees back wages in full, a Civil Aviation Ministry official, who declined to be identified citing government rules, said in New Delhi today. Kingfisher, the only Indian carrier with orders for Airbus SAS A380 superjumbos, hasn’t paid workers since May.
Kingfisher jumped 7 percent to 14.45 rupees at the close in Mumbai, the first gain in four trading sessions. The benchmark BSE India Sensitive Index fell 0.7 percent.
India’s aviation regulator suspended Kingfisher’s permit in October following flight disruptions caused by strikes triggered by unpaid wages. Employees later agreed to resume work after the management pledged to pay salaries. Sanjay Aggarwal, chief executive officer of Kingfisher, today met K.N. Shrivastava, secretary in the Ministry of Civil Aviation, on the restart efforts.
International Lease Finance Corp., the world’s second- biggest aircraft-leasing company, said today that it’s struggling to retrieve six single-aisle Airbus A320s provided to Kingfisher because of the carrier’s disputes with government agencies in India such as airport operators and tax authorities.
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