The Hindu Business Line : Kingfisher may fly global if eligibility norms are relaxed

Reduction of eligibility norms is being considered for domestic private airlinesto three years from the current five years for flying foreign routes.

Bangalore , Oct. 6

Kingfisher Airlines may finally be able to fly international routes on its own as the Civil Aviation Ministry is seriously considering relaxation of eligibility norms for domestic airlines.

Sources close to the Ministry told Business Line that the reduction of eligibility norms was being considered to three years from the current five years for flying foreign routes. In case the norms are relaxed, Kingfisher Airlines will be able to fly international routes by 2008.

As a fallback arrangement, the airline is in talks with American Airlines and MaxJet to use their rights to fly from the US to India.

The airline has in a recent presentation to analysts said that it is in the process of finalising a damp lease arrangement with a US carrier to operate non-stop flights to India.

Services planned

It plans to fly A340-500 between San Francisco and Bangalore and New York-Mumbai by the first quarter of 2008. It also plans to operate A330-200 between London-Mumbai and Hong Kong-Mumbai during the same period. The aircraft will have super first class, ultra business class and the Kingfisher class configuration of seats. The airline has already placed orders for specific aircraft types to fly on these routes.

The UB Group in its presentation said that for pre-delivery payments for aircraft, it has roped in some Indian banks for syndication of loans worth $200 million. It said that for the airline's leading edge service model, the UB Group has invested around $100 million. While it has tied up with some banks for working capital requirements for the next two years, the airline plans to access the primary market in two years' time.

For the financial year 2006, Kingfisher Airline posted a loss (PBT) of Rs 190.8 crore on an income of Rs 584.5 crore. Its EBIDTA was negative at Rs 172.1 crore. While fuel costs were Rs 235.6 crore, total operating cost was Rs 680.6 crore and other costs were Rs 76 crore.

In its first year of operations, it has achieved a market share of 8.7 per cent. It operates 2,200 flights a month.