Struggling Kingfisher airline 'to fund itself'
Struggling Kingfisher Airlines told regulators today that it had sufficient funds to restart operations in a bid to convince them to reinstate its flying licence, an official said.india Updated: Oct 26, 2012 18:35 IST
Struggling Kingfisher Airlines told regulators on Friday that it had sufficient funds to restart operations in a bid to convince them to reinstate its flying licence, an official said.
"Kingfisher officials say they can fund their operations using their own resources, without outside investors," an official at the regulatory directorate general of civil aviation (DGCA) told AFP on condition of anonymity.
The airline, which has been battling to stay afloat after staff strikes, falling share prices and billions of rupees of debt, has been looking for investors to help turn around its fortunes.
"Kingfisher officials say they are trying, but they don't expect to get investors for the next four to five months. Until then, they say they can manage on their own," said the DGCA official.
A Kingfisher spokesman said that the company would "not comment on (its) internal financial arrangements".
The meeting between regulators and airline officials took place after Kingfisher staff agreed to go back to work on Thursday, ending a strike over not being paid for more than six months.
Kingfisher workers agreed to the management's new offer that they would receive at least four months' worth of unpaid salaries by Christmas, sending stocks up 4.59% to 11.40 rupees in morning trade on Friday.
But its planes cannot take off again until the firm persuades Indian aviation regulators to restore its flying licence, which was suspended last week.
India last month allowed foreign airlines to purchase stakes of up to 49 percent in domestic carriers, in an effort to help cash-strapped airlines like Kingfisher.
Kingfisher's owner, 56-year-old liquor baron Vijay Mallya lost his billionaire ranking in Forbes magazine on Thursday, which ranked him 73rd in India's rich list with a net worth of $800 million, down from $1.1 billion last year.
Mallya, known as the "King of Good Times" and the co-owner of a Formula One team, has come under criticism for his flamboyant lifestyle in contrast to the struggles of his staff.
His "Force India" Formula One team is set to race this weekend at the Indian Grand Prix in New Delhi and reports said Mallya was expected to attend, after much media speculation over his whereabouts in recent weeks.
Richard Branson, the boss of the British airline Virgin, defended Mallya but said he had made himself an easy target for criticism.
"Most people would have walked away six months ago and all the jobs would have been lost," he told India's NDTV news channel. "At least he is fighting to try to keep the airline going.
"If you do sort of show your wealth too much, I think that's dangerous for any business person...particularly in somewhere like India, where there are a lot of very poor people, so I think maybe, maybe when he looks back on his life he might regret being so perhaps so overtly flamboyant in sort of showing off his wealth."