The Hindu Business Line : Worst is over for airlines: Mallya

Break-even this month: The Chairman of Kingfisher Airlines, Mr Vijay Mallya, at a press conference after the company's AGM in Bangalore on Friday. The company expects operational break-even in December.

Our Bureau

Bangalore, Dec. 26 Mr Vijay Mallya, Kingfisher Airlines’ Chairman, said on Friday that the airline will break even this month even as he claimed that the worst was over for the airline industry.

“The worst is over for the airline industry and the fundamentals of the sector are strong,” Mr Mallya said at the sidelines of the airline’s annual general meeting.

He said during December, the airline expects to get total revenues of around Rs 500 crore and will “operationally” break even .

He said once the government lowers the sales tax on aviation turbine fuel to 4 per cent from 26 per cent, the airline will pass on most of the savings to the customers.

“We want more people to fly and would pass on most of the savings to the passengers,” he said.

PE funds interested

Mr Mallya said apart from being in talks with banks, the airline had received extremely good response from some PE funds.

Refusing to name the PE funds which are in talks with the airline, he said the funds saw increasing opportunities in the sector with the aviation turbine fuel prices coming down to $36 a barrel from over $100 a barrel sometime ago.

“They now believe that the civil aviation has a good future in India,” he said. Mr Mallya said the airline’s plan to raise $400 million is on track.

He ruled out plans to pick up stake in Jet Airways with which it has an alliance for ground handling services as well as other maintenance services.

“There is no compelling reason to have equity transaction between the two airlines,” he said.

New services

Mr Mallya said on January 5, the airline will launch its Mumbai-London service and on January 12, Mumbai – Hong Kong service and on January 16, Mumbai – Singapore service. The airline plans to launch flights from Bangalore to Dubai, Male, Singapore and Bangkok soon.

United Spirits

United Spirits had declared a dividend of 15 per cent (Rs 18.9 crore) for the year. At the annual general meeting of United Spirits on Friday, its Chairman, Mr Vijay Mallya, said that once the company pay soff Whyte & Mackay debt, it will consider paying higher dividends to its shareholders.

He said the company has started bottling of Whyte & Mackay brands in India.

He said during 2007-08, the company sold 73.8 million cases while its nearest competitor sold about 15 million cases.