Bangalore: Kingfisher Airlines Ltd expects to break even in December on an estimated revenue of Rs500 crore for the month, according to chairman Vijay Mallya.
“All going well, we should break even in December itself,” Mallya said after the annual general meeting of shareholders.
Mallya also said Kingfisher’s plans to raise $400 million (about Rs1,916 crore) to fund operations were on track and that the company was in discussions with private equity investors.
Raising funds: Chairman Vijay Mallya says the airline’s plans to raise $400 million to fund operations remain on track. Harikrishna Katragadda / Mint
“I think the worst is over and there’s no reason why private equity investors who had expressed interest when oil was at $100 a barrel shouldn’t be more interested when oil is $36 a barrel,” Mallya said.
Kingfisher, India’s second largest private sector carrier by passengers behind Jet Airways (India) Ltd, had reported a net loss of Rs641 crore for the six months to 30 September, following its merger with budget carrier Deccan Aviation Ltd.
Kingfisher, which had announced an operational alliance with Jet, plans to launch two flights connecting Mumbai to Hong Kong and Singapore in January, besides flights to Colombo, Male and Dubai from Bangalore.
“The fundamentals for the aviation industry are strong but the government has to recognize that the aviation industry is a very important part of India’s infrastructure,” Mallya said, a position long held by India’s private aviation companies looking for tax breaks and other concessions from the government amid a downturn in their business.
Airlines have been demanding that aviation fuel be given the so-called declared goods status that will enable it to be taxed at 4% across India, instead of an average of about 26% because of varying taxes in different states. But a committee of state finance ministers has opposed this demand.
“We can pass on pretty much majority of the savings and that would be good for the industry, make air travel even more affordable and stimulate an industry that has slowed down considerably,” claimed Mallya.
Kingfisher shares rose 0.87% to Rs34.80 n the Bombay Stock Exchange on Friday.