The besieged private carrier, Kingfisher Airlines, owned by liquor industry leader Vijay Mallya, is in a financial chaos struggling to pay back its Rs 6,000 crore loans. Kingfisher Airlines is facing a tough time. It has turned penniless and stranded 15 aircrafts following the incapability of paying its maintenance and overhauling expenses.
This move might limit its domestic as well as international operations further. Kingfisher Airlines is looking for financial aid from investors and leniency from banks to stay afloat. Nearly 50 senior and junior pilots were freed from Kingfisher Airlines Thursday, before the completion of their notice period. But according to an industry person, who is familiar with the development, about 140 pilots have resigned and 11 have left without the loss-making carrier, Kingfisher Airlines, giving them a clearance, to join IndiGo, its rival budget airline.
Kingfisher Airlines has parked its grounded aircrafts at various airports across the country. The aircrafts include the wide-body A330s that are used for long hauls. Over 50 of 345 Kingfisher aircrafts were going to be cut as announced in November, and it seems the curtailed schedule is likely to run till March.
This is not the first time Kingfisher Airlines has been forced to take such a step. Last year, industry leader Vijay Mallya, had stranded 16 aircraft from its narrow-body fleet (A320s) owing to its V2500-A5 engine type engine material failure. It was only after several rounds of talks that Kingfisher could resolve the issue with engine manufacturer IAE.
Pratip Chaudhury, Chairman of State Bank of India said, “Aviation major Kingfisher Airlines , now in distress due to mounting debt problems, was an important company and efforts were being made by banks to make it viable.”
Kingfisher Airlines had 69 aircraft by the end of last year and now has only 40 in its active fleet. Of these, 15 are ATRs and the rest a mix of A320s, A321s and A330s.
Chaudhury said, “As Kingfisher Airlines owed money to multiple vendors, it requires a lot of coordination and cooperation among all the lenders. As late as yesterday, there was a high level meeting going on. So every measure is being taken that Kingfisher will remain viable.”
There are talks going on between Kingfisher airlines and the leasing companies to take back aircraft on 'as is' basis. People familiar with the matter said, “The leasing companies, which are yet to agree to any formula, haven't approached the Indian civil aviation regulator for de-possessing of aircraft either.”
Pratip Chaudhury also believes that streamlining of loans by state-owned Air India has been a blessing by the government and people hope that it remains possible for Kingfisher Airlines as it is the national hauler.