Kingfisher to return aircrafts

India's Kingfisher Airlines Ltd plans to return some aircraft voluntarily to lessors after defaulting on payments and has seen a fresh exodus of pilots, local media reported. The Directorate General of Civil Aviation (DGCA) has asked the struggling carrier to explain why it has cancelled a large number of flights since Saturday. Kingfisher will return two more Airbus A320s this month to their lessors, as their leases have been terminated because of payment defaults.

Of the 64 planes in its fleet, Kingfisher is using just over a dozen to operate flights currently. The Times of India newspaper said that 35 of Kingfisher's A320 commanders quit the airline on February 14, followed by another over the weekend. In all, about 300-350 pilots have quit the airline in the last six months, it said, without citing any sources. Kingfisher, controlled by liquor baron Vijay Mallya, has cancelled 32 out of the 240 flights that it operates each day, the airlines said on Saturday, adding that it expected to return to full service within days.

Brace yourselves frequent fliers in India, the aviation industry is about to hit some turbulence

It looks like Indian airlines are not the only ones sweating under the pressure of high operating costs and increasing threats from the competition: even international carriers are feeling the heat and starting to cut capacity to India. That could mean bad news for passengers because ticket prices, at least on some international routes, could rise in the face of reduced competition.

On Monday, Austria’s largest airline, Austrian Airlines, which operates a global route network of around 130 destinations, said it is discontinuing flights in the Mumbai-Vienna sector from March 25 as the route has became unprofitable because of the challenging economic situation and intensifying competition from other airlines.  Unless there is reform in the aviation sector, especially in the matters of jet fuel prices and undercutting of ticket prices by Air India, we’re likely to see more airlines cutting down their operations in India.

Austrian Airline’s CEO, Jaan Albrecht, said in a statement that, “From the summer of 2012 onwards, we shall be sharply increasing flight frequencies to our core markets in Eastern Europe, and building up capacity to the Middle East in a trade-off with the destination of Mumbai.” It’s not the only airline to cite problems with operating in India, which is one of the fastest-growing aviation markets in the world. Local carriers are already floundering massively operating on domestic routes. While passenger traffic has climbed in leaps and bounds in recent years, operating costs, cut-throat price wars and a skewed policy environment mean that more than 80 percent of Indian carriers are losing money. Kingfisher Airlines is a stark case in point.

Not surprisingly, even international airlines are wilting under the same set of pressures. According to a report in the Business Standard, global airline Air France announced that it is reducing its frequency to Delhi, Mumbai and Bangalore to six flights a week, ostensibly to adjust with lower demand in summer, although it’s likely that tough operating conditions would also have played a part that decision.  In the past year, more than five foreign airlines have withdrawn flights from the Mumbai and Delhi routes, citing high operating costs, including high airport and fuel charges. These include AirAsia, Air AsiaX, Thai AirAsia, FinnAir and Virgin Atlantic. Just last month, American Airlines announced it would discontinue its Delhi flights, while Lufthansa also halted its flights to Kolkata.

Other leading global airlines like British Airways, Air France-KLM and Lufthansa have also said they would rethink their plans of flying in and out of Delhi if airport charges are increased by a whopping 280 percent, according to the newspaper report.  Unfortunately, it looks like their problems are just about to multiply because flying out of Mumbai could also get more expensive as the airport operator, MIAL, is in the process of acquiring 16 acres of nearby land, according to another Business Standard report. This expansion cost is likely to result in higher airport development fees, which currently stands at Rs 600 for an international passenger and Rs 100 for a domestic passenger.

Of course, we already know about high jet fuel prices: fuel costs account for nearly half the operating cost of domestic carriers. High sales tax on jet fuel is a big culprit here — about 24 percent , one of the highest in the world. There has been talk of allowing foreign carriers to take up to a 49 percent stake in local carriers, which might ease some financial pressure off local carriers.  But what of international ones? Unless there is reform in the aviation sector, especially in the matters of jet fuel prices and undercutting of ticket prices by Air India, we’re likely to see more airlines cutting down their operations in India.

For fliers, that can only mean higher prices from the airlines that stay back.

Malaysian onboard OneWorld

Malaysia Airlines is to join oneworld®, adding one of aviation's most frequent award winners to the world's leading quality airline alliance. Malaysia Airlines was unanimously elected a oneworld member designate by the Chief Executives of the alliance's member airlines, at a meeting on the sidelines of IATA's 2011 World Air Transport Summit, which opens in Singapore today. A formal alliance membership agreement will be completed soon.

Malaysia Airlines is expected to start flying as part of oneworld late next year. As it prepares for its alliance membership, Malaysia Airlines intends to develop bilateral links with a number of oneworld's established partners, who include some of the biggest and best names in the airline industry. It already codeshares with oneworld partners Cathay Pacific and Royal Jordanian. When it becomes part of oneworld, its customers will gain access to the alliance's truly global network. It will expand oneworld's global coverage to almost 950 destinations in 150 countries, served by a combined fleet of more than 2,600 aircraft operating some 10,000 flights a day and carrying 358 million passengers a year.

Three established oneworld member airlines currently serve Malaysia, with Cathay Pacific, Japan Airlines and Royal Jordanian flying to Kuala Lumpur, and Cathay Pacific also to Penang and, through its Dragonair affiliate, Kota Kinabalu. Opportunities for expanding the alliance's coverage of the country will be explored as Malaysia Airlines prepares to join. When it becomes part of oneworld, members of Malaysia Airlines Enrich frequent flyer program will be able to earn and redeem rewards on any of oneworld's 14 other top-class carriers, with top tier members able to use any of the group's 550 plus airport lounges, and its network will be covered by oneworld's range of alliance fares.

At the same time, frequent flyer cardholders of oneworld's established airlines will be able to earn and redeem rewards when flying on Malaysia Airlines. Qantas will serve a s sponsor of Malaysia Airlines entry into oneworld.Malaysia Airlines Chairman Tan Sri Dr Mohd Munir Abdul Majid said: "The Board of Malaysia Airlines had targeted entry into an alliance this year. I am glad we are at the stage where the initiation with oneworld is formalized."

Malaysia Airlines Managing Director and Chief Executive Officer Tengku Azmil Aziz said: "With the world airline industry increasingly focused on alliances, we have carried out careful analysis of the options now available to Malaysia Airlines. The time is clearly right for our company to join one of the global airline groups, and oneworld is clearly the best option for us. As a company highly focused on quality service, we are immensely proud to have been invited to join the highest quality alliance with the best airline partners offering a global network that best complements our own. We look forward to completing all joining requirements as soon as possible."

American Airlines Chairman and Chief Executive Gerard Arpey, Chairman of the oneworld Governing Board, said: "Today's agreement with Malaysia Airlines represents another significant milestone in our effort to establish oneworld firmly as the world's premier airline alliance with members unmatched in brand and service quality. Not only will Malaysia Airlines bolster oneworld's presence in Asia, in North America it will also further strengthen our alliance's position at Los Angeles, where American Airlines has significantly expanded with new international and domestic flights as well as enhanced facilities. We look forward to welcoming Malaysia Airlines to oneworld."

oneworld CEO Bruce Ashby said: "oneworld already features four of the best airlines in Asia-Pacific, including member elect Kingfisher Airlines. Adding another leading Asian carrier, in Malaysia Airlines, will greatly enhance oneworld's offering throughout the world's fast growing region for air travel demand." Qantas Chief Executive Officer Alan Joyce said: "Malaysia Airlines is an ideal candidate for oneworld, with its world-class reputation for customer service mirroring oneworld's own focus. Its Kuala Lumpur home will provide our customers with another of the world's best airports, geographically well placed between our existing hubs. Qantas is delighted to be serving as its sponsor in joining oneworld."

Kingfisher Airlines optimistic about growth

India's Kingfisher Airlines is looking to lease both wide-body and narrow-body aircraft to meet an unanticipated surge in demand as the domestic economy recovers more quickly than expected, the company's chairman, Vijay Mallya, said on Monday. Mallya also told reporters on the sidelines of the International Air Transport Association's annual meeting in Singapore that the company had revived a plan to sell Global Depository Receipts, taking higher oil prices into calculation. Asked if Kingfisher's current capacity was enough to cater to the projected increase in demand, he said: "Not quite, that is why we are looking for leased capacity.

"Kingfisher at one time had several aircraft that were on order from Airbus for delivery in 2010 and 2011. During the 2008-2009 crisis, I actually postponed the delivery of those aircraft to 2012 and 2013," Mallya said. "So right now we are looking for capacity, but our own new deliveries will start in about 18 months." He said he was looking to lease both narrow-body and wide-body aircraft. "We have been experiencing for the last six months unprecedented load factors, which I have never seen in the last six years," Mallya said. "We are running at mid to high 80 percent on every flight, which is extremely healthy."

According to its website, Kingfisher has 66 aircraft, mostly Airbus jets and ATR turbo-prop variants. It has more than 125 planes on order. Loss-making Kingfisher, India's second-largest airline by market share, has restructured its debt by converting almost INR12 billion rupees (USD$268 million) of loans into equity. Its current debt stands at about INR60 billion rupees. Last month, it reported a net loss of INR10.27 billion rupees in the fiscal year ending March 31, versus a loss of INR16.47 billion rupees the year before. But it had positive EBITDA amounting to INR1.4 billion rupees, the company says. "We reported significantly improved numbers and EBITDA profit for the first time. This is a sign of things to come," Mallya said.

He said the company had also revived a proposal to sell GDRs of USD$250 million - USD$350 million, but gave few details. "We had an excellent roadshow for our GDR in January and early February this year and we presented a compelling business plan." He said the plan assumed crude oil at USD$90 per barrel. "The minute crude oil prices started going up to USD$120 plus per barrel, prospective investors asked us to rework our business plans, which we did."

The flamboyant Mallya, who controls the United Breweries Group, owns a Grand Prix motor racing team and a team in India's cricket league, said Kingfisher's growth should be enhanced as it joins the oneworld airline alliance, which also includes Cathay Pacific, British Airways and Qantas. "The opportunities to leverage this alliance are huge," he said, adding that Kingfisher would become a fully operational member by 2012. "We see this as being a contributor of about 5-6 percent of enhanced revenue to us."

He said Kingfisher was continuing to lobby the government to allow foreign airlines to take stakes in Indian carriers. "Airlines in India must raise capital and the opportunity to raise capital from foreign airlines must not be excluded and that's why we will continue to request the government of India to reconsider its foreign direct investment policy." Kingfisher flies to eight international destinations and to more than 50 towns and cities in India. Its fleet of turboprop aircraft will help it to respond to the pattern of wealth creation in India, Mallya added. "There is a lot of wealth in tier-2 and tier-3 cities that is being created," he said. "It is no longer a situation where wealth in India is restricted to the big metro cities, so it offers a huge amount of opportunity. "Kingfisher is well positioned because it has a large number of ATR aircraft which are ideal to service the emerging demand in tier-2 and tier-3 cities," he said.

Kingfisher Airlines in deeper trouble

Vijay Mallya owned Kingfisher Airlines has landed in fresh trouble with Singapore based DVB Aviation Finance Asia Ltd , a subsidiary of Germany’s DVB Bank, suing the airline in the British courts for defaulting to the payment of aircraft rentals. The Singapore based company had leased two Airbus 320 aircraft to Kingfisher Airlines in 2006. The suit was filed on 16th July and will be heard by the Queen’s Bench division’s commercial court. A source from DVB Aviation, who did not want to be named, said the suit has been filed after the airline failed to pay dues for the last three months. These payments are made on monthly basis. The DVB Aviation official said the aircraft are still deployed with Kingfisher Airlines and they have not yet asked the airline to return the aircraft.

This is not the first time when Kingfisher Airlines finds itself in trouble for non-payment of dues. The company has oil dues of around Rs 484 crores which it owes to state run firm Hindustan Petroleum Corp Limited (HPCL). HPCL has asked for a bank guarantee from UB group has threatened to take the airline to the court if it does not clear dues by July-end.

The airline has run into problems with its bankers too with IDBI Bank recalling a Rs 900 crore loan in May this year. But after Mallya paid the short term Rs 150 crore loan, its other Rs 750 crore loan was rolled over.

Kingfisher Airlines wants to raise $250 million via a global depository rights issue. A rights issue by the promoters or a QIP (qualified institutional placement) is also being planned. This is part of a bigger $400 million fund raising exercise the airline has been planning for a while. SBI Caps is advising the ailing Kingfisher to restructure its Rs 7,413-crore debt (as on December 2009). Earlier, RBI had shot down SBI’s proposal to recast Kingfisher’s Rs 2,099 crore short-term debt. The remaining amount is long-term debt. 

spicejet to be rebranded

One of India's low cost airlines is all set to be re branded. It will no more be called spicejet, it will be called as Sun Airlines. This is after the media Barron of south India and the owner of sun network Mr Kalanidhi Maran had acquired almost 40% of the airlines stake to become the single large stake owner of the airlines. Thus propelling a change in name. Chairman and owner of Kingfisher Airlines Dr Vijay Malya has expressed his wishes and has given Mr Maran a welcome to airline industry in one of his twitter messages.

Kingfisher on board oneworld

India's only five star Airliner Kingfisher is now officially a part of oneworld alliance. After been invited by the one world group and also asked to take the clearance from the Director General of Civil Aviation in India, the airliner has managed to join hands with oneworld. The DGCA has given the airliner a go ahead with this process. The chairman of Kingfisher airlines Mr. Vijay Mallya had expressed that he was very happy to be invited to join hands with oneworld and to be apart of this means a lot to kingfisher fliers, now the airliner will have 800 new destination across 150 countries.
With the new international terminal to be inaugurated in a short span of time from now at New Delhi, the one world group operating to the Indian capital can now share the Kingfisher's premium lounge to their premier flier's as well. The code sharing between the member airlines of oneworld is also under way.

Kingfisher adds Bangkok to its International destination

The only India's five star airlines Kingfisher Airlines starting from 17th April has added Bangkok to its International destination. Daily flights from Delhi to Bangkok and excluding Tuesdays daily flights from Mumbai to Bangkok.
The Delhi - Bangkok will depart 0130 hrs and will reach 0730 hrs, in return departing Bangkok 2025 hrs and reaching Delhi 2325 hrs daily. The Mumbai - Bangkok will depart Bangkok 0830 hrs and arrive in Mumbai 1125 hrs in return depart mumbai 1315 hrs and arrive at 1505 hrs at Bangkok. The airline has deployed A320 in both the routes.

Indian market showing signs of Recovery

As the entire world was crippled due to recession, Indian Aviation industry was one amongst the worst hit.
The industry  is showing some sort of recovery, was flipping through the news papers and was happy to see that the Indian market is also showing some sort of recovery.
Spicejet and Kingfisher have plans of expanding their fleet by 2012.
Spice jet is looking to add another 9 aircraft's to its fleet and surprisingly Kingfisher is looking to double itsi fleet.

Oil marketing companies threaten to stop aviation fuel supply for kingfisher airlines.

The state owned oil marketing companies have threatened kingfisher airlines to cease supply of aviation turbine fuel (ATF).

The oil industry had started suppling ATF to kingfisher and jet airways on 'cash and carry basis' from 27th Jan, as they failed to clear their dues from October 22nd to october 31st, though the 90 days credit was over.

Jet has immediately cleared its due of Rs 97.87 crore. But kingfisher still owes Rs 73.03 crore to Hindustan Petroleum for the 10 days supply and Rs 85 crores to Bharat Petroleum for old installments.