Kingfisher to expand overseas operations
03 Dec 2008
New Delhi: The Vijay Mallya-promoted Kingfisher Airlines has been allowed to extend services on various international sectors, including Mumbai-London, Chennai-Colombo and Mumbai-Singapore.
At present the only foreign sector that Kingfisher Airlines can operate on is on the Bangalore-London route. The airline became eligible to fly internationally in August this year.
Government officials said, ''The government has granted permission to Kingfisher to operate daily services to Singapore, Hong Kong, Bangkok, Colombo and Dhaka with immediate effect.''
The airline said it would progressively announce the time frame for launch of these services. The airline said it would operate services to Hong Kong and Singapore in the next few months but may decide to wait to operate on the Mumbai-London sector as the route already has excess capacity.
Kingfisher has been aggressively expanding in the domestic market and recently announced plans to enter into an operational alliance with rival Jet Airways. It is however, making losses due to high fuel price, excess capacity and predatory pricing.
Government officials said despite the global economic downturn, Singapore and Hong Kong had high traffic and offered robust premium air traffic growth. According to an industry estimate, designated airlines carried 7.89 lakh passengers during the January-October, 2008 period on the India-Singapore sector against 7.48 lakh passengers in the previous year.
The India-Hong Kong sector also saw the traffic growing with designated carriers carrying 3.58 lakh passengers during January-October period.
Singapore International Airlines has the biggest share of the skies in the India Singapore sector. It operates from various Indian cities such as Delhi, Mumbai, Ahmedabad and Bangalore and has an average load factor of about 75 per cent.
A couple of weeks ago Vijay Mallya, announced plans to sell a 25-per cent stake in Kingfisher airline to a foreign rival as his airline continues to haemorrhage. He confirmed having received several expressions of interest in his airline, which is India's second-largest private carrier. However FDI rules in aviation curremtly forbid foreign companies from taking stakes in the country's airlines. Mallya said he had requested the government to allow foreign airlines to acquire up to 25 per cent in Indian carriers.
Indian carriers are expected to collectively post a loss of nearly $2 billion in the year to March 2009. To cut costs, Kingfisher last month agreed to an unprecedented alliance with arch rival Jet, India's largest private carrier, which is hoped to allow the two to weather a severe industry downturn.
The cost-cutting pact, the first of its kind in India, covers joint fuel management, ground handling, ticketing and crew sharing. The two groups will also discuss which routes they will fly. However both deny the arrangement amounts to a cartel.
