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.
Keywords: Kingfisher Airlines, low-cost segment, rights issue
Comments:
when Kingfisher Airlines Took over Air Deccan , they were the second
largest Fleet with almost 87 aircraft , Qualified People who were
Experienced in Running Low cost (Deccan) and that time Kingfisher Red
Load's Increased tremendously.
Suprisingly most of experienced people were thrown out by KFA , which
were readily picked Up by Indigo .thereafter Profitable Routes were
shut down by KFA ,and all the trainee Pilots were grounded .Which in
turn was a benefit for Indigo which in turn took that slots .
KFA has not deposited the TDS(Tax Deducted at Source) of employee for
last three Year's and same goes for PF( Provident Fund) & VPF (
Voluntry provident Fund ) and continually delaying Salaries of pilots
and other employee's .
I feel Low cost run in right manner and right team can yeild good
revenue.
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