Mumbai: India’s largest carrier by passengers flown, Kingfisher Airlines Ltd, plans to raise Rs500 crore. Chairman Vijay Mallya says the airline is also determined to stem losses. Edited excerts from an interview:
Give us a sense of what the picture looks like for you.
We cut our capacity, returned over 11 aircraft, deferred aircraft deliveries, rationalized our route network and, of course, to all those industry pundits who say that low-fare carriers will succeed and high-cost, full-service carriers will suffer—almost 70% of Kingfisher’s entire route network is, in fact, a single-class low-fare product.
Fund concerns: Vijay Mallya. Hemant Mishra / Mint
So, we have been able to effectively compete with the other low-fare carriers; we have also been able to effectively compete with the full-service carriers, particularly on the metro routes, and we have taken some tough decisions.
However, domestically, we are more than break even at the earnings before interest, taxes, depreciation and amortization level; international operations are losing money, understandably so, because there is a lot of credit repricing by international carriers. But, overall, we are in much better shape than we were last year.
What is the outlook?
It all depends on how the peak season over Diwali, Dussehra, Christmas and New Year actually behaves for us in terms of demand. We are halfway through monsoon, and we have done all right. What we need to now ensure is that we sustain this through to the peak when, hopefully, income and earnings will improve.
But I am determined to stop these losses and I will do whatever it takes. I am not after market share only; yes, we are proud to be India’s largest airline, but not at the cost of shareholders.
How much is the total debt that you currently have?
Kingfisher’s total debt today is approximately Rs6,000 crore and that is why the board decided that rather than go for more debt, we will actually raise equity. Of course, this does not take into account any potential change in government policy for FDI (foreign direct investment), and we have decided to go to the Indian equity market. We have multiple options; we will appoint a merchant banker and decide the way forward very quickly.
When do you hope to close in on these options?
The media is always interested in deadlines. The board decided today, we will take action obviously very expeditiously and get to the wire as quickly as we can, but I cannot put a time limit to it saying we will do it in three-four weeks. But we will do it expeditiously.