Kingfisher Airlines lacks funding plan, says govt

Written by Reuters | New Delhi | Updated: Dec 27 2012, 07:26am hrs
All stakeholders need to be convinced: Aviation min

Grounded Indian carrier Kingfisher Airlines has failed to present regulators with a clear funding plan under a proposal to get it flying again, the countrys aviation minister said on Wednesday.

The airline, owned by liquor tycoon Vijay Mallya and suspended in October over unpaid debts and salaries, submitted a plan on Monday to the Directorate General of Civil Aviation (DGCA) to resume a limited service. According to local media reports, Kingfishers parent company, UB Group, offered to inject R6,500 crore ($118.3 million) into the carrier a key condition for getting it airborne again.

But aviation minister Ajit Singh told reporters on Wednesday that UB did not say they are going to give anything to Kingfisher, which has estimated debts of $2.5 billion.

He did not specify if the proposal, to resume operations with five planes, had been rejected. But he noted that the airline owed money to banks, staff, airports, and tax authorities.

All those stakeholders needed to be convinced the relaunch plan was viable before the DGCA allowed the airline to fly again, Singh said.

Kingfisher, which has been trying unsuccessfully to raise fresh cash for more than a year, is hoping to tap Etihad Airways as an investor.

The Gulf carrier, which is seeking to widen operations in India and other Asian markets, is in the final stages of talks to buy part of either Kingfisher or Indian rival Jet Airways, an Indian government official said last week.

Last month, Diageo bought a majority stake in United Spirits, also a UB Group company, for $2.1 billion. UB did not specify if part of that money would be injected into Kingfisher.