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Kingfisher in course correction mode

Kingfisher in course correction mode
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First Published: Mon, Mar 16 2009. 10 34 PM IST

 New flight path: A file photo of UB Group chief Vijay Mallya and Deccan Aviation chairman G.R. Gopinath. When Mallya had bought Air Deccan in Dec 2007, he hoped to realize his ambition to fly oversea
New flight path: A file photo of UB Group chief Vijay Mallya and Deccan Aviation chairman G.R. Gopinath. When Mallya had bought Air Deccan in Dec 2007, he hoped to realize his ambition to fly oversea
Updated: Mon, Mar 16 2009. 10 34 PM IST
New Delhi: Aircraft maker Airbus SAS has sold two A340 passenger planes meant for delivery to Kingfisher Airlines Ltd to government buyers in West Asia, an executive at the European plane manufacturer said.
New flight path: A file photo of UB Group chief Vijay Mallya and Deccan Aviation chairman G.R. Gopinath. When Mallya had bought Air Deccan in Dec 2007, he hoped to realize his ambition to fly overseas using rights that Kingfisher would gain from the merger. But the carrier may now be winding down its plans. Hemant Mishra / Mint
Kingfisher is separately trying to sub-lease two more A330 planes from its fleet to Nigerian carrier Arik Air Ltd, the Indian carrier said in a statement last fortnight.
The deals indicate that billionaire businessman Vijay Mallya-run Kingfisher may be winding down its once-ambitious plans to fly to international destinations such as San Francisco, Hong Kong, Singapore, Bangkok, Kuala Lumpur and Kuwait, among others.
The airline, including its low-cost service Kingfisher Red, currently connects Indian locations with two foreign cities: London and Colombo.
It was not immediately clear if Kingfisher made any money on the sale of the two A340 planes to the buyers in West Asia. Typically, airline customers book a plane by paying a small amount, making good the remaining on delivery, mostly through debt. If there is a huge demand for planes, then those who have booked them get a commission on such sales.
Mumbai-headquartered Kingfisher had ordered 10 long-haul aircraft to start its international operations last year including five A340s—capable of flying routes such as Bangalore-San Francisco non-stop—and five A330s, which ply typically between India and Europe.
It sold three of the A340 planes to Arik Air last year and, after keeping two A330s grounded for at least six months in India, is now in talks to sub-lease them to the same carrier.
Two A330s are being used by Kingfisher to operate between Mumbai and London and ply the Bangalore-London route with one aircraft as a standby.
Airbus’ executive president, sales and marketing, Kiran Rao told Mint that his company has sold one of the remaining A340 aircraft to a “government customer” and is in the final stages of giving another to a government buyer.
Rao declined to name the customers but hinted they were from West Asia. Airlines and leasing firms from the region have bought several aircraft over the past few years.
The two A330s to be sub-leased out by Kingfisher were expected to be utilized by the airline on Hong Kong and Singapore flights from Mumbai, which the airline had planned to launch by January-end.
With no new deliveries slated until next year, Kingfisher may restrict its international operations to London and Colombo though it can fly to West Asia and Asia-Pacific using some of the 43 medium-haul Airbus A320 in its fleet.
Besides rights to Hong Kong, Dubai and Singapore, the carrier has permission from the civil aviation ministry for flights between Bangalore-Bangkok, Mumbai-Male, Kolkata-Dhaka and Kolkata-Chittagong. But even there the airline is going cautiously. The launch of its Dubai-Bangalore has been deferred several times since January and is now “on hold”, said an airline executive, who didn’t want to be named. The Dubai launch was expected first in January and then postponed further and removed from the reservations systems.
To be sure, Kingfisher is not alone in pulling back international operations. Jet Airways (India) Ltd has also leased out several wide-bodied aircraft in its fleet to West Asian carriers and by April will have nine aircraft out on lease, according to the carrier.
European carriers, too, are pulling flights out and airline firms such as Virgin Atlantic Airways Ltd plan to pull out their flagship Mumbai-London flight from May, leaving a Delhi-London daily service as their only India operation.
The head of a New Delhi-based travel website said international demand has stagnated from and to India over the past two months after the peak season ending early January and airlines were hence being “conservative”.
“These are short-term knee-jerk reactions for the next 6-12 months, (aimed at) de-risking their own investments in the market,” said Aloke Bajpai, chief executive of Le Travenues Technology Pvt. Ltd-run iXigo.com. Bajpai said international searches on his website has not grown as much as the domestic searches but he expects the international market that sees “discretionary” purchases to be back on track by next year.
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First Published: Mon, Mar 16 2009. 10 34 PM IST