India's Kingfisher lacks funding plan - minister

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Grounded Indian carrier Kingfisher Airlines, a possible target for Etihad Airways, has failed to present regulators with a clear funding plan under a proposal to get it flying again, the country's aviation minister has said.

The airline, owned by liquor tycoon Vijay Mallya and suspended in October over unpaid debts and salaries, submitted a plan on Monday to the Directorate General of Civil Aviation (DGCA) to resume a limited service.

According to local media reports, Kingfisher's parent company, UB Group, offered to inject 6.5 billion rupees ($118.3m) into the carrier - a key condition for getting it airborne again.

But Aviation Minister Ajit Singh told reporters on Wednesday that UB "did not say they are going to give anything" to Kingfisher, which has estimated debts of $2.5bn.

He did not specify if the proposal, to resume operations with five planes, had been rejected. But he noted that the airline owed money to banks, staff, airports, and tax authorities.

All those stakeholders needed to be convinced the relaunch plan was viable before the DGCA allowed the airline to fly again, Singh said.

Kingfisher, which has been trying unsuccessfully to raise fresh cash for more than a year, is hoping to tap Etihad Airways as an investor.

The Gulf carrier, which is seeking to widen operations in India and other Asian markets, is in the final stages of talks to buy part of either Kingfisher or Indian rival Jet Airways , an Indian government official said last week.

Last month, Diageo Plc bought a majority stake in United Spirits, also a UB Group company, for $2.1bn. UB did not specify if part of that money would be injected into Kingfisher.

Kingfisher shares erased intraday gains of as much as 3.8 percent on Wednesday to end flat on the day.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Playing by the numbers: Saudi Arabian Airlines

Playing by the numbers: Saudi Arabian Airlines

Why is Saudia only mentioned as an afterthought when one talks...

Ports of change

Ports of change

Investment in ports in the GCC region is at a record high, as...

Crowded skies in the Middle East

Crowded skies in the Middle East

Aviation experts give their suggestions on how to solve the Middle...

Most Discussed