The Hindu Business Line : Kingfisher Airlines signs deal with Airbus

Mr Vijay Mallya, Chairman, UB Group, with Mr John Leahy, Chief Commercial Officer, Airbus, with the model of Airbus A320 aircraft at a press conference in Mumbai on Saturday. - Paul Noronha

Mumbai , Dec. 18

KINGFISHER Airlines, promoted by the UB group, has signed contracts to acquire 10 A-320 aircraft on firm order with options to buy another 20 until 2008 at a cost of up to $1.8 billion or Rs 8,100 crore. Besides these 30 aircraft, the airline will lease four A-320 aircraft.

According to the airline's earlier plans, it was to buy four A-320 aircraft with 10 options.

Under the revised plans, it has signed the purchase agreement for four A320s and exercised six options, making a total of 10 firm orders, with options for a further 20 new aircraft.

According to the Chairman of Kingfisher Airlines, Mr Vijay Mallya, the airline will begin operations in April on receiving the four A-320s to be leased from Debis Air Finance based in the Netherlands. The first four aircraft to be bought by the company will be received by the end of 2005, he said. The paid-up capital of the airline currently stands at Rs 60 crore, as against the Government requirement of Rs 30 crore for commercial airline companies. Mr Mallya said that the paid-up capital would be hiked to Rs 160 crore in January 2005, to meet the operating expenses for the first year. The increase will be financed through internal funds of United Breweries Holdings Ltd, the parent company of the airline.

Mr Mallya told presspersons here on Saturday that the company would explore several options to finance its operations beyond the first year.

The Chief Financial Officer, Mr Ravi Nedungadi, said the airline hoped to break even in the first year of operations. However, this would depend on its passenger load factor.

Dr Mallya also announced the appointment of Mr Alex Wilcox as President and Chief Operating Officer of Kingfisher Airlines. Mr Wilcox was earlier with JetBlue, a US-based carrier. The Chief Commercial Officer, Airbus, Mr John Leahy, who was also present at the press conference, said Kingfisher, with its fleet of new A-320 aircraft, would be one of the youngest airlines across the world.

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