Private carrier Kingfisher Airlines plans to exit the low-cost segment soon.
Mr Vijay Mallya, Chairman, UB Group, said the company plans to “do away with Kingfisher Red because we don’t intend to compete in the low-cost segment".
Addressing the media on the sidelines of the company’s annual general meeting here, he said that the load factors in Kingfisher Class, the full-service segment, was more than Kingfisher Red.
“Clearly, the margins of Kingfisher Class are higher than Kingfisher Red because the yields are better. The reconfiguration of aircraft has already started and should be complete in the next few months,” said Mr Mallya.
While there are plans to make 10 per cent capacity addition “with minimal investment”, the company is also looking at cutting down unprofitable routes in the domestic segment and also defer its plans to acquire Airbus A380 aircraft.
May sell Mumbai office
Mr Mallya also said that the company was awaiting clearances for several international routes from the Ministry of Civil Aviation.
Another initiative that the company is looking at to bring down its debt is the sale of its office in Mumbai. “Any initiative that we can take to reduce our debt is going to be pursued,” he said.
Shareholders okay rights issue
The shareholders also approved a Rs 2,000-crore rights issue, said Mr Mallya.
With the rising interest costs and rate hikes by the Reserve Bank of India, the company was looking at all available ways and means of reducing the interest burden, he added.