The Hindu Business Line : Kingfisher to fly by end of April: Mallya

KINGFISHER Airlines (promoted by United Breweries Group) will start flying by the end of April 2005 with 2,000 seats daily, the UB Chairman, Mr Vijay Mallya, said here on Monday.

"All our plans are well on track. Kingfisher will start flying by the end of April 2005. We have ordered 14 brand new A 320 aircraft from Airbus and are leasing four more," Mr Mallya said on the sidelines of the World Economic Forum.

The first two A 320s will be delivered in April 2005 and by December 2005, Kingfisher will induct six more planes to take the total fleet size to eight, thereby enhancing the daily seat capacity to 8,000, he disclosed. The airline plans to add another 10 aircraft in 2006, he said.

Mr Mallya said that Kingfisher would endeavour to provide efficient services to customers at an affordable price. "Our cost of operations will be low, given the way we have structured the airline. This benefit will be passed on to the customers," he stated.

On the fare structure, Mr Mallya said the airlines will have a simple fare structure, but will have dynamic pricing. "I am not going for cheap-cheap fares but can assure that the passengers will get value for money," he said.

"No-frills pricing has its own merits, but what can you do when even during the last day of your flight, the seats are not fully booked. In this eventuality, Kingfisher might consider giving a discount to the customers who book tickets at the very last moment," he noted.

Kingfisher will sign an agreement with Airbus in Mumbai on December 18 to finalise its acquisition plan. The UB Group Chairman refused to divulge the cost of the aircraft, which at current prices is estimated to cost $57 million each. "We hope to strike a good deal with Airbus. The planes will provide lots of passenger comfort," he quipped.

While the airline was initially planning to buy four new planes with options for acquiring another 10 more, Mr Mallya said that the explosive growth in the domestic aviation sector has forced the company to convert the options into firm orders. "With the annual growth rate in domestic aviation pegged at about 30 per cent, even the 14 aircraft will be too little. This would require a significantly higher number of aircraft to cater to the growth," he said.

The airline may also consider selling shares to help finance future acquisition plans. "That clearly is an option. The compulsion for an initial public offering will always be there, given the requirement of more planes to meet the growing demand," he said. Currently, the airline has a capital base of Rs 120 crore, which is fully subscribed by United Breweries (Holdings) Ltd.