Financial Daily from THE HINDU group of publications
Wednesday, Aug 03, 2005
Financial Daily from THE HINDU group of publications Wednesday, Aug 03, 2005 |
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Logistics
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Airlines UB sets up airline co in US — Mallya's Children own 75 pc stake Ashwini Phadnis
New Delhi , Aug 2 THE UB group has worked around stringent US regulations disallowing foreign nationals to set up an airline in that country. The group's Kingfisher Airline Inc is 75 per cent owned by Chairman Mr Vijay Mallya's three children, all of whom are US citizens. "I am in a unique position. Each of my three kids — Sidhartha, Leana and Tanya — are US citizens and own 25 per cent each. The rest is owned by me. I am a non-resident Indian and my children are persons of Indian origin (PIO)," Mr Mallya told Business Line. The Delaware-based company would be used to launch international operations from the US to India if Kingfisher India is not allowed to fly abroad. The decision to set up the airline in Delaware was taken as the company is scheduled to induct wide body aircraft from 2007 for international flights. However, current Indian policies do not allow international operations. "From the start I have been against the Government policy of allowing only domestic airlines with five-years of operations in India to fly abroad. How is it that airlines are allowed to fly from Delhi to Chennai but not onwards to Colombo? On the other hand, the Government is not stopping start-up airlines like Etihad, Air Arabia and Jet Star to fly in-and-out from India," Mr Mallya said. "There is huge potential between India and the US. We would look at operating non-stop, although we may be forced to make a technical halt en route," he added. Unlike its domestic operations, Kingfisher's international flights will not have a single-class configuration. "We are studying whether there should be a two or a three-class configuration on the wide-body aircraft. We will probably have a large business class," Mr Mallya said. The airline also seeks to set up a hangar for maintenance work on its aircraft. It has identified land in Mumbai, but is ready to set up the hangar in Bangalore alternatively, officials said.
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