As per the present policy, foreign carriers are not allowed to pick stake in Indian airlines. However, the government allows FDI up to 100 per cent in other areas of the aviation sector, like developing of greenfield airports or in cargo and maintenance, repair and overhaul facilities.
The discrepancy was pointed out by the finance ministry in the light of changes in foreign direct investment norms, as specified in Press Note II issued earlier this year, while considering the company's proposal to raise Rs 708 crore (Rs 7.08 billion) through fully convertible warrants. Prior to the Press Note II, the FDI component in Kingfisher Airline was just 16.45 per cent.
Kingfisher Airlines, National Aviation Company of India Limited -- the state-owned company that runs Air India -- and Indigo could face additional cost pressures, with reinsurance rates expected to harden following the accident involving the Air France aircraft that was flying from Rio de Janeiro to Paris with 228 passengers on board.
SBI leads a 17-member consortium of lenders that is trying to recover dues running into over Rs 7,500 crore (Rs 75 billion) in principal alone from Kingfisher Airlines.
The employees gathered at terminal-1B and chanted slogans against the airlines' chief Naresh Goyal and Vijay Mallya, the chairman of Kingfisher Airlines. They also vented their ire against the government for not taking any action against the Jet Airways for sacking nearly 1,900 of its employees, mostly probationers and trainees.
The alliance, announced in a late night press conference on Monday, will involve code-sharing on domestic and international flights, an interline agreement, joint fuel management, common ground-handling services and cross-selling flights through the global ticketing system.
Six pilots of Kingfisher Airlines, GoAir and Air India have been de-rostered by the Directorate General of Civil Aviation after they violated guidelines while landing on a short runway at Mumbai airport under rainy conditions. The DGCA also issued notices to the three airlines on the matter asking them to explain why the strict guidelines were not followed.
These pilots have completed their probation and all endorsements, but the company has decided not to renew their service contracts in view of the huge losses and capacity reduction.
Barely a fortnight after it launched international operations and integrated low-cost carrier Simplify Deccan with it, Vijay Mallya-promoted Kingfisher Airlines plans to lay off at least 300 employees, official orders for which are to be conveyed on Monday.
The Rs 3.6-crore (Rs 36-million) payable by Kingfisher in the court would cover the dues for three months -- July, August and September.
Career opportunity with Kingfisher Airlines as flight attendants or in-flight managers for positions across Mumbai, Delhi, Bangalore, Kolkata, Hyderabad and Chennai.
Air India and Jet would, however, operate their flights to the US and Canada by taking a diversion, sources in the airlines said.
To add aircraft, more services this year, even as full-service airlines hold their expansion plans.
Mallya has denied that he had fled India and said he would comply with laws.
BJP spokesperson alleges that the then Principal Secretary to Prime Minister Pulok Chatterjee would "snatch files" from Dr Manmohan Singh to take it to 10 Janpath, Sonia Gandhi's residence.
Kingfisher, Jet and state-owned Air owe Rs 4,000 crore to oil companies and airports. Dues to the Airports Authority of India, private airports and oil companies IOC, BPCL and HPCL were to have been cleared by March 31, under the government's mandate. Industry figures show that the three airlines are collectively projected to make operating losses of Rs 5,000 crore.
Kiran Rao, company's executive vice-president for sales, marketing and customer affairs, also said that government-owned Air India and private carriers Jet Airways and Kingfisher Airlines will create a niche in the global market due to their quality service in the next few years despite stiff international competition.
Kingfisher owes Rs 257.62 crore (Rs 2.57 billion) to the AAI, while Jet Airways Rs 38.49 crore (Rs 384.9 million) and its low cost arm JetLite Rs 13.96 crore (Rs 139.6 million), as on January 31, Civil Aviation Minister and Minister for Overseas Affairs Vayalar Ravi informed the Rajya Sabha on Thursday.
Low-cost carrier Simplify Deccan will be rebranded Kingfisher Red, a separate brand identity from Vijay Mallya-promoted full-service carrier Kingfisher Airlines.
The civil aviation ministry granted the traffic rights to Deccan Aviation, in which Kingfisher Airlines merged in 2007, to operate services to London and other global destinations. The airline, which has already firmed up plans to launch its Bangalore-London (Heathrow) flight from the first week of September, would be starting its international services on the rights granted to Deccan Aviation on the India-UK sector.
Kingfisher Airlines says its net loss has fallen by 39.54 per cent for the quarter ended December 31, 2010.
Mahatma Gandhi's items, including his pocket watch, a pair of sandals, a plate, a bowl and his rimmed glasses, were sold at an auction by New York-based Antiquorum Auctioneers on Thursday. UB Group Chairman Vijay Mallya reportedly bought the items for $1.8 million.Preliminary reports suggested that Mallya may hand over the items to the Indian government.
Vijay Mallya's Kingfisher Airlines has decided to change its earlier fleet acquisition plan. Though it aims to more than double the size from 66 to 137 aircraft by 2015-16, it does not now plan to induct Airbus 380s.
Low-cost carrier Deccan and Vijay Mallya-led Kingfisher Airlines on Wednesday decided to merge and create a single corporate entity to cut down operational costs and accelerate their journey to profitability.
Full-service carrier Kingfisher Airlines has sought permission from the petroleum ministry to extend the date for paying dues to public sector oil companies for aviation turbine fuel.
Jet Airways chairman Naresh Goyal said the strategic alliance forged almost a year ago between his company and Kingfisher Airlines has still not achieved tangible progress, and added that airfares need to rise by 20-25 per cent.
Banks are seeking an order that Mallya should appear in person before the court.
After rationalising flights and routes, major domestic airlines like Kingfisher, Jet Airways and SpiceJet are introducing sharp cutbacks in staff and salaries to cope with slower passenger growth and rising aviation turbine fuel costs. Manpower typically accounts for 10-15 per cent of an airline's total costs.
Low cost carriers have 55 per cent of the market, up from 45 per cent in Q1 last year, and 30 per cent two years back. Does it mean India really is an LCC market? The performance of the airlines also seem to suggest that. While budget carrier Spicejet announced a small profit for Q1, all the big boys in the industry seem to be in trouble.
"This is the best time that Indian aviation is seeing and the next six months will be critical. The airlines should monetise this growth without getting into unnecessary capacity addition," said Nikhil Vora, managing director, IDFC-SSKI, a financial services group.
Submits new settlement offer to SBI
In a filing to the Bombay Stock Exchange, the Vijay Mallya-led firm said its board would meet on July 28 to 'consider issue of further share capital up to Rs 500 crore and matters consequential thereto'.
Kingfisher Airlines' plans to raise $400 million are on track and private equity players have showed keen interest in investing in the airline, its chairman Vijay Mallya said on Friday after the annual general meeting in Bangalore.
Kingfisher pays 37 per cent higher premium while Air India defers renewal. "The Air France crash is expected to provide a $600-$700 million hit (to global insurance companies), which is 40 per cent of the total premium collected, and therefore hardening of reinsurance rates was evident. We had seen prices go up from $2 billion to $4 billion after the 9/11 attacks (in the US)," said ICICI Lombard Reinsurance Head Rajiv Kumaraswamy.
Kingfisher Airlines, the two-year-old private airline promoted by liquor conglomerate UB, has decided to replace its pilots' gross salaries with a two-part pay structure based on the number of hours they fly.
Most of the Air Deccan aircraft that await repainting are small single-aisle ATR jets. When contacted, the Kingfisher Airlines spokesperson said re-painting of aircraft is typically done when the aircraft visits the maintenance, repair, overhaul workshop for scheduled maintenance checks.
Succumbing to government pressure, Vijay Mallya-promoted Kingfisher Airlines on Monday decided to cut fares, but with the condition that the government put aviation turbine fuel in the declared goods category. Kingfisher has also assured that it would not resort to retrenchments to deal with the downturn.
Currently, airlines, including Jet Airways and Kingfisher Airlines, undertake their own ground-handling. But under the new policy, they will not be permitted to do so. Carriers have said that at least 8,000 employees working in these companies will need to be given the pink slip if the new policy is implemented. They have also argued that outsourcing will dramatically increase their overall costs, especially at a time when airlines are reeling under losses.
The government on Tuesday said the major private domestic airlines owed over Rs 274 crore (Rs 2.74 billion) to the Airports Authority of India for availing its services.
