Financial Daily from THE HINDU group of publications
Tuesday, Jan 24, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jan 24, 2006 |
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Airlines Logistics - Overseas Borrowings Kingfisher Air plans FCCBs to raise $200 m — Private equity route, IPO other options K. Giriprakash
Mr Vijay Mallya
Bangalore , Jan. 23 KINGFISHER Air has spread its fund-raising options to include foreign currency convertible bond (FCCB) or through the private equity route apart from its earlier option of floating an IPO to raise around $200 million. The Kingfisher Air Chairman, Mr Vijay Mallya, told Business Line that instead of confining itself to the option of floating an IPO, the airline is now examining other options - through either issuing FCCB or the private equity route. "We are sure we won't sell cheap. The brand Kingfisher carries a huge equity in the market," Mr Mallya said. Within seven months of its launch, KingFisher, which is promoted by the UB Group, has earned revenues of around Rs 600 crore with an average passenger load factor (PLF) between 70 per cent and 75 per cent. He pointed out that between May and September, the airline's PLF was as high as 99 per cent. It expects to break even during 2006-07 fiscal. Mr Mallya said the airline has already paid around $100 million for the purchase of the new aircraft. Part of the $200-million, which will be raised shortly, will be used to part-finance the purchase of more aircraft. The next new A320 will join the fleet on February 1 followed by five more similar types between March and December. By the end of 2006, the airline will have a total of 21 aircraft including six ATRs. It has also ordered for A330s, due for delivery by 2007. Mr Mallya said the airline will not go back on its decision on ordering A380s. "We are 100 per cent sure. It is up to the Government to start preparations to expand the airports to accommodate such a big aircraft," he said. The first of the five A380s, for which the airline has placed orders , will join the airline's fleet by 2010. The list price of the 555-seater A380s, considered the largest passenger commercial in the world, is around $230 million. Kingfisher Air will deploy A380s for its long-haul non-stop flights. The A380s are preferred because they can fly the maximum number of passengers at a time when the number of take off slots available at some of the busiest airports in the world are shrinking.
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