Kingfisher Airlines Ltd.'s 532747.BY +9.70% chairman has finally put dates to promises, saying in a letter to employees that it is looking to restart operations by the end of March with a cash infusion of more than $100 million from parent UB Group 507458.BY +1.18% and "other associates."
Dr Vijay Mallya said also that the company is still in talks with several investors to sell a stake and raise funds to revive the now-grounded Airline.
European Pressphoto Agency
A Kingfisher Airlines Aircraft taking off from Chatrapati Shivaji International Airport in Mumbai, Feb. 20, 2012.
"Investors need to be convinced about the long-term prospects of their proposed investment in Kingfisher, and this takes time" Mr. Mallya said in the letter, which was seen by The Wall Street Journal.
It comes one day after some Kingfisher employees met to plan legal action against the airline because they haven't been paid in months.
Dr. Mallya, who has been criticized by some employees for not speaking to them despite the crisis, said operations will be restarted with seven planes, which will be ramped up to 21 in four months.
"The second part is a full-scale rehabilitation of our airline, growing to 57 aircraft within 12 months of recapitalization," he said, adding that the initial restart would require 6.50 billion rupees ($118.94 million), which would come from the UB Group and "other associates".
He didn't Elaborate.
He added that the airline will submit additional data to the country's aviation regulator to get back its license and that it is in the process of getting no-objection letters from its vendors.
Kingfisher stocks surged on news of the plan, recently trading up 7.51% at 14.46 rupees in a Bombay Stock Exchange market down 0.18%.
It will, however, be an uphill task for Kingfisher to start and sustain operations, given that it hasn't solved most of its problems.
Kingfisher's flights have been grounded since Oct. 1, first due to a strike by its employees over non-payment of salaries and then because of the suspension of its license.
The airline's license expired on Dec. 31 with the civil aviation regulator refusing to renew it because it wasn't satisfied with Kingfisher's plans to restart operations.
The airline can, however, reapply for the permit within two years.
Kingfisher has made losses since its inception in May 2005 and now owes more than $2.5 billion to its lenders, suppliers, leasing companies, airport operators, other airlines, employees and to the government in taxes.
Thursday, Mr. Mallya said the airline's banks are not looking to recall loans or make the airline sell its assets.
Mr. Mallya has said before that he is in talks with several investors, including Abu Dhabi-based carrier Etihad Airways, to sell a stake in the airline.
Another Indian airline, Jet Airways, 532617.BY -1.57% is also trying to sell a stake to Etihad.
Meanwhile, a senior Kingfisher engineer said employees are planning legal action against the airline for not paying their salaries.
"We are in talks with our lawyers and will decide on the legal notice soon," another employee said.
An official at the civil aviation ministry recently said Kingfisher still owes its employees about 1.2 billion rupees in salaries.
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| Kingfisher Air Plans Revival With Parent UB's Funds, E-Mail Says Bloomberg Kingfisher, the only Indian carrier to order Airbus SAS superjumbos, has been seeking cash for more than two years and was in talks with possible investors such as Etihad Airways PJSC for its revival. The airline lost its operating license on Jan. 1 ... See all stories on this topic » | |
| In letter to Kingfisher employees, Vijay Mallya shares revival plan NDTV Kingfisher Airlines chairman Vijay Mallya has told employees that the grounded carrier is aiming for a limited re-start utilizing seven aircraft. In a letter to employees, the first since Kingfisher'soperating license expired, Mr Mallya detailed the ... See all stories on this topic » |
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| Mallya outlines revival plan for Kingfisher, shares surge Reuters India MUMBAI (Reuters) - Shares in grounded carrier Kingfisher Airlines(KING.NS) jumped as much as 9.7 percent on Thursday after a letter sent to staff from Chairman Vijay Mallya outlined plans for a revival to be funded with 6.5 billion rupees from his UB ... See all stories on this topic » | ||
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