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Tuesday, June 7, 2011

Kingfisher to raise $300 million via GDRs

SINGAPORE: Kingfisher Airlines, India's second largest private carrier in terms of market share, plans to raise $300 million through a GDR issue as oil prices show signs of easing after sustained upward spiral, its promoter Vijay Mallya said. 

"When I made my business plan fuel prices were at $90 which later climbed up to $120. What the investors have asked me is to come back with a revised business plan and the negotiations are still on," Mallya said at the sidelines of the annual general meeting of International Air Transport Association (IATA) in Singapore. Oil prices have eased in May after touching record highs in April. 

He also said the government should consider allowing foreign carriers to invest in airlines in India. "We will keep making representations to the government. A foreign airline will understand the investment opportunity in a much better way," he said. 

Kingfisher has applied to the Indian civil aviation regulator and the civil aviation ministry for traffic rights on some of the international routes, Mallya said. Kingfisher will leverage its membership of oneworld alliance to strengthen international footprint especially on the London and Hong Kong routes, Mallya said. The airline will become a fully operational member of the alliance by 2012. Malaysian Airlines is also tipped to join the alliance. 

The airline will also strengthen its presence in smaller cities as these markets are generating big demand, he said. The non-availability of aircraft came in the way of expansion in the domestic and the international markets. "Due to the economic downturn in 2008-2009, Kingfisher had postponed deliveries that were due in 2010-2011 to 2012-2013. With the recovery of the markets now and also the Indian economy reviving much quicker, we are looking forward to these deliveries that would start in the next 18 months," Mallya said. 

(The reporter is in Singapore on invitation from IATA)

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