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Get Discount worth Rs 300 on all Return Tickets on Kingfisher Airlines

2009-10-18T19:02:00.000-07:00

Fly Kingfisher Red is the low cost brand of Kingfisher Airlines. Fly kingfisher Red Airlines offers cheap airfare and special discounted fares online only on Fly Kingfisher Red. As we know Air Deccan was the first one, second was Simplifly Deccan and currently Kingfisher Red. Fly Kingfisher Red provides domestic flights in indian airlines industry. Fly Kinfisher Red is part of India’s 5 star Kingfisher Airlines operates flights for Domestic and International Destinations. Fly Kingfisher Red also Known as Kingfisher Airlines in India. Fly Kingfisher Red main flight hub is Bangalore and other two important hubs are Delhi and Mumbai. You can book Fly Kingfisher Red International flights and Fly Kingfisher Red Domestic Flights online.

Kingfisher Airlines Launches Daily Direct Flights From Singapore To Mumbai

2009-10-16T20:49:00.000-07:00

Kingfisher Airlines, India’s only five-star Kingfisher Airline, has started operating daily non-stop flights from Singapore to Mumbai. Kingfisher flights on this new route are operated using brand new Airbus A330-200 aircraft.

Kingfisher Airline has also started daily operations between Hong Kong and Mumbai operating the Airbus A330-200 aircraft. The launch of kingfisher flights from India to Singapore and Hong Kong marks the first time that Kingfisher Airlines will be flying to Southeast Asia.

Kingfisher Airlines flight IT 071 will take off from Mumbai at 10:55 pm and arrive at Hong Kong at 8:05 am, local time. The return kingfisher flight IT 072 will take off from Hong Kong at 2:05 pm, local time and arrive in Mumbai at 5:50 pm. Similarly, Kingfisher flight IT 029 will take off from Mumbai at 11:05 pm and arrive at Singapore at 7:05 am, local time. The return kingfisher flight IT 030 will take off from Singapore at 10:15 am and arrive in Mumbai at 1:05 pm local time.

The start of Kingfisher Airlines operations signals the airline s confidence in the traffic growth potential between Singapore and India. India is Singapore fourth largest source of tourist arrivals by air. In 2008, there were 2.5 million passenger movements between India and Singapore.

Commenting on the launch of this new kingfisher flight international route, Atul Kumria, Regional Director-North America, Kingfisher Airlines Limited, said, I am happy to announce daily non-stop kingfisher flights from Singapore and Hong Kong to Mumbai. We are internationally known for our award-winning service and a truly five-star Kingfisher Airlines, world-class flying experience. Fly the best fly the Kingfisher Airlines.

Fares soar as airlines chip in to help Jet

2009-09-09T23:12:00.001-07:00



Fares soar as airlines chip in to help Jet

The second day of the Jet Airways pilot protest saw the Bombay High Court issuing a contempt notice to pilots, fares soar and the airline industry putting its support behind the airline's management by taking up the slack of the 250 flights (above 500 domestic and international) that were grounded today after more than 400 pilots took mass sick leave for the second day in protest against two pilots sacked last month and three yesterday.

Travel portals gear up as better days return

2009-08-26T19:02:00.000-07:00



Travel portals gear up as better days return

With business and leisure travel picking up once again, travel portals are going all out to woo consumers with new discounted packages and an increased focus on making the digital medium more user-friendly. A few are also looking at setting up a brick-and-mortar presence to assist high-budget travellers looking for more credit before booking online.
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Fog delays, diverts flights

2009-03-01T02:36:00.000-08:00

Fog delays, diverts flights

Seven incoming flights were diverted to Bangalore and four departures were delayed by more than half an hour after poor visibility disrupted aircraft operations at the airport on Saturday.

Visibility fell to less than 300 metres as fog enveloped the southern suburbs including the airport. Road traffic along national highway 45 from Tambaram to Villupuram was also disrupted.

Motorists said they had a tough time driving as they could not see road signs clearly. Airport sources said that visibility dipped considerably between 4 am to 6 am and disrupted landing of aircraft. Two Jetlite flights from Colombo, two Air India flights from Mumbai, a Lufthansa cargo aircraft and Singapore Airlines cargo aircraft were diverted to Bangalore because they could not land here.

An Oman Air flight from Dubai landed after hovering for sometime. Air India, Jet Airways and Kingfisher flights that were scheduled to depart to Delhi and a Muscat-bound Oman Airways flight suffered minor delays because of poor visibility.

An airport official said that the whole of the airfield was enveloped by a blanket of fog early in the morning. This is unusual season for mist or fog. Visibility at the airport has dipped only during the first week of January. This is the first time we are experiencing such fog this month.

Met officials said that haze had been reported from different parts of the city. We can expect such hazy conditions whenever humidity goes up. The humidity was 95 percent yesterday. Such high humidity happens when moisture comes from the sea breeze.

Kingfisher Red pips JetLite in terms of number of passengers

2009-02-16T18:06:00.001-08:00

Kingfisher Airlines and its low-cost Kingfisher Red together stole a march over Jet Airways-JetLite, by carrying the highest number of passengers in January, even though the total passenger traffic recorded a marginal increase since December.

The total number of passengers carried by domestic carriers rose from 33.23 lakh in December to 33.26 lakh last month, official figures released today said.

Kingfisher Airlines and its subsidiary kingfisher Red, former Air Deccan, carried 9.19 lakh passengers in January, beating Jet Airways-JetLite which together flew 8.37 passengers last month.

Air India Express carried 5.55 lakh passengers on its domestic route network, the statistics showed. Till December last year, JetLite has been leading the Indian airlines in terms of the number of passengers carried.

Among the low-cost carriers, IndiGo led the way by flying 4.57 lakh air travellers, followed by SpiceJet with 3.93 lakh, JetLite 2.1 lakh and the remaining less than one lakh each.

As with the actual numbers of passengers carried, Kingfisher Red led by the percentage share among the carriers with 27.6 per cent, followed by 17.9 by JetLite and 16.7 by Air India Express.

Kingfisher Red Airlines to Launch Flights between Solapur & Mumbai

2009-02-10T20:01:00.000-08:00

Kingfisher Red Airlines, India’s first and only 5-Star airline, today announced that it would commence flights connecting Solapur with Mumbai. To herald the launch of this new route, Kingfisher Red Airlines operated a special commemorative flight from Solapur to Mumbai.

The services will be operated four times a week and will be operated with Kingfisher Red Service using an ATR aircraft. On board, guests will get complimentary hot and filling food. Guests can earn miles every time they fly and these King Miles can be redeemed for free tickets. What’s more, Kingfisher Red Airlines provides all this and a lot more at the price of a low fare ticket.

Commenting on the launch of this new route, Mr. Subhash Gupte, Vice Chairman, The UB Group and Director, Kingfisher Airlines Limited, said, I am delighted to announce the launch of services connecting Solapur with the nation’s financial capital, Mumbai. The flights connecting Solapur with Mumbai will cater to the unmet needs the community of traders, entrepreneurs and industrialists who have been instrumental in bolstering trade and commerce in the region.

Kingfisher Red has redefined Low Fare Flying in India and is dedicated to upholding the highest standards of excellence in making a journey a memorable experience without burning a hole in your pocket. Kingfisher Red Airlines has blazed a trail of innovations and introduced a range of market-firsts that have revolutionized the whole experience of flying. By elevating its customers to a level of being guests and not just passengers, Kingfisher Red Airlines has endeared itself to consumers.

About Kingfisher Airlines

Kingfisher Red Airlines is India’s first and only 5-Star airline and the only one to offer a premium first class. Besides being the first and only airline in India to offer in-flight entertainment on every seat, Kingfisher Airlines offers LIVE TV with 16 channels of live and exciting content. Kingfisher Airline has received numerous awards for innovation, customer responsiveness and was voted the Best New Airline of the Year, within months of its launch. Kingfisher Airlines is a part of the UB Group that is one of India’s largest conglomerates with diverse interests and a global presence. The UB Group is also the largest Indian alcoholic beverages like beer and spirits company and the third largest drinks group in the world.

Kingfisher Red Airlines covers all segments of air travel from low fares to premium service and offers most flights by any single airline network in India. With the launch of Mumbai –Solapur sector Kingfisher Red Airlines will now connect 72 cities with a fleet of 76 aircraft and operate over 400 flights a day.

Kingfisherred New Services To Be Launched With Effect From February 17, 2009

Kingfisher postpones Hong Kong, Singapore flights

2009-01-17T21:30:00.000-08:00

Kingfisher Airlines has said it has postponed its planned flights to Hong Kong and Singapore due to some technical reasons, reports Financial Express.

Previously the airline had announced its plan to launch the two flights from Jan.12, 2009 and 18, respectively.

The company said that the Airbus A-330, delivered to Kingfisher, which were supposed to be deployed on the Hong Kong and Singapore routes, have some performance issues with the in flight entertainment system.

Shares of Kingfisher Airlines closed up Rs 0.25, or 0.73 per cent, at Rs 34.50. The total volume of shares traded at the BSE was 261,887.

For air passengers, things are suddenly looking up

2009-01-15T21:44:00.000-08:00

It began with Singapore Airlines slashing economy fares by a staggering 52 per cent to Singapore and other south-east Asian destinations from India. A New Year promotion fare offered return tickets to Singapore for Rs 16,830 inclusive of all taxes. Thai Airways dropped fares on the Delhi-Bangkok and Delhi-Ho Chi Minh routes. German carrier Lufthansa reduced fuel surcharges and British Airways dropped fares by 35 per cent on all its flights from India to London. Emirates is now offering tickets to passengers travelling to destinations like Dubai, London and New York from India with return economy-class airfares starting from as low as Rs 15,490, Rs 20,990 and Rs 39,990, respectively. In other words, if you have any of these destinations on your list, this is the time to plan that trip.

But what’s interesting is that despite no real change in the economics governing their industry, coinciding with the lean season, low fares on domestic sectors as promised by the airlines are suddenly back. The drop in fares in many instances is quite significant.

The drops seem even more dramatic when one looks at fares on offer by full-service airlines like Jet Airways, Indian and Kingfisher. A Jet Airways one-way ticket for Delhi-Bangalore on January 20 is available for Rs 4,500 including all taxes and surcharges. This is a massive drop from even December, when a Delhi-Bangalore one-way ticket booked many weeks in advance would cost upwards of Rs 8,000. A visit to the Cleartrip website and you will see across-the-board drop in fares by Jet and other full-service airlines resulting in savings of almost Rs 3,000-4,000 on a return flight on many trunk routes.

The low-fare airlines have also reduced fares, although the drop isn’t as dramatic the fare gap between low-fare airlines and full-service airlines has lowered. An IndiGo flight to Mumbai from Delhi and back would cost around Rs 6,000, down from around Rs 11,000 in November 2008, a substantial fall by any indication. A ticket for January 14 from Delhi to Mumbai on SpiceJet was available for slightly less than Rs 3,000 basic fares of Rs 95, Rs 99 and even Rs 9 are on offer.

In the last few weeks, airlines have been announcing that APEX special fares for bookings 21 days later is back. So, if things are looking better one week down the line, they may look even better three weeks down. The Delhi-Bangalore fare on Jet drops from Rs 4,500 to Rs 3,325, if you can plan your life a bit.

While the cut in fares is good news for passengers, I am not sure if it is such good news for airlines. At least one seasoned industry expert termed the fare drop as a return to chaotic market conditions and irrational pricing. IndiGo’s president Aditya Ghosh is quick to point out that ability to sell at low fares depends critically on a particular airline’s cost structure and the fact that selling below cost as is now happening is unsustainable in the long run. To grow without diluting yields, high borrowings or huge unpaid bills is easier said than done.

Secondly, what if the cut in fares fails to stimulate demand There was almost a 5 per cent drop in the total number of passengers flown in India in 2008, when compared with the year before the second half of the year took more of a hit than the first.

But what if that is not only on account of high fares Many carriers say that despite the revision end of December, loads are yet to pick up. January 2009 loads are lower than even those in January 2008, despite fares now being lower. The market, many argue, was being stimulated by the younger fliers, whose propensity to save was lower. But with jobs at stake and income expectations for the year appearing to be low, loads may not pick up easily. In the current economic scenario, reduced prices may not generate enough additional traffic and revenues to even offset, leave alone exceed, the adverse impact of reduced yields. What happens then

Industry analysts feel that there is no real increase in the customer base in India and that the phenomenal growth in 2006 was partly due to Air Deccan that propelled many first-time fliers to take to the skies, which did not necessarily translate into repeats.

Moreover, the outlook for the year remains grim, regardless of what one may or may not do. The Centre for Asia Pacific Aviation’s outlook for the year argues that domestic traffic for the 12 months ending March 31, 2009, may show a decline of as much as 10-12 per cent year-on-year and that the promotional pricing announced in January 2009 may only have a marginal impact as there continues to be a substantial margin between low-fare airline prices and second class air-conditioned rail travel. IATA predicts losses of airlines in the Asia Pacific region going up in 2009, not coming down.

So, in the final analysis, I would say the fare drops are certainly real. Whether or not they will be sustained is harder to answer. So, probably the best thing to do is to enjoy it while it lasts and postpone any plans other than travel plans.

Ban on visitors' entry into airport till Jan 28

2009-01-15T20:49:00.000-08:00

If you are planning to see somebody off or pick up friends and relatives from Chandigarh airport, be prepared to end the courtesies
and emotional goodbyes in the parking lot itself. Heightening security ahead of Republic Day, Airport Authority of India has decided to place a ban on entry of visitors at the airport complex from Friday onwards.

Officials say the order, to be in place till January 28, is nothing new.

There is no security threat. It’s an annual exercise we carry out during Independence Day and Republic Day celebrations. Visitors include all those coming to the airport for seeing off or receiving passengers, senior officials told TOI. Hence, we advise visitors to accompany fliers only till the parking area, he said, and added visitors’ tickets had also been withdrawn from the counters till January 28.

Airport authorities have also asked flight operators to doubly verify antecedents of travellers flying to and from Chandigarh.

As many as 1,000 passengers visit the airport every day, either boarding or arriving here in five sets of flights operated from here. The carriers include Jet Airways, Kingfisher Airlines, Air India and MDLR Airlines.

Speaking to The Times of India flight operators confirmed to have received instructions from authorities.

Claiming to have conveyed the same to passengers flying during this period, an executive with an operator said, Since we were informed well in time, we have passed on this bit to our passengers so that those who come to receive or see off them at the airport do not face any inconvenience or embarrassment. He added adequate measures had been taken to ensure verification before issuing tickets.

What's happening to air fares in India?

2008-09-25T23:15:00.001-07:00

Have airlines and air fares gone mad ? If you compare current fares with those the same time last year, or even a few months ago, you could be forgiven for thinking they have been schizophrenic.

To start with, an examination of flights from the capital to any of the main metros on the low fare airlines shows that routes are priced almost exactly the same as each other. So, Delhi-Mumbai (a two-hour flight) will cost you roughly the same as Delhi-Chennai (two and a half hours) or Delhi-Bangalore. Last week, this was roughly Rs 10,000-11,000 for a return ticket. It appears ticket pricing bears no relation to the distance flown.

APEX (book early and pay less) appears and disappears with unerring regularity. Just a week ago, few carriers were offering lower fares, whether one travelled the next day or three months down the line. This is in sharp contrast to a year ago where fares for travel after a few weeks could drop as sharply as 50 per cent.

This week, it's back again. While all metro fares ex-Delhi appear to be the same on every low cost carrier (Rs 10,800 for next week), they've brought in some of the "apex" flavour back.

For one month later, the fares on all the low fare airlines are around Rs 8,800 for Delhi to all other metros. In fact, fares are so erratic these days that it doesn't help to book early as the same flight may be available at a far lower price a few weeks later.

Last-minute fares also appear to be a thing of the past. The erstwhile Indian Airlines (now Air India) had created quite a stir in the market place by offering throw-away last-minute fares.

The logic was that instead of letting the seat go waste, fill it up and earn some revenue in the process. This happy situation for passengers ended soon after former CMD Vishwapati Trivedi left and the new management revised its thinking.

Special promotions are also fewer and harder to come by. For the last two years, if loads fell on particular routes, usually some promotions would appear. This August, loads on one of the most lucrative sectors, Delhi-Mumbai, have been pretty low.

This is in sharp contrast to last June when I paid close to Rs 11,000 one way for a 2 pm IndiGo flight for what was absolutely the last seat on the plane. So, in August, faced with pathetic loads, most low fare airlines were offering you a seat for Delhi-Mumbai for Re 1 plus taxes and extras that one now takes for granted. The total one-way fare worked out to about Rs 3,000.

Loads haven't risen much but for some odd reason, fares have. My Mumbai ticket for later this week is just over Rs 5,000 one way. Two airline CEOs say there is little to choose between keeping the fare slightly higher and letting loads slip a bit and between lowering fares and letting loads rise a bit.

But what strikes one as even more bizarre is that while on some routes aircraft are alarmingly empty, no seats are to be found on others. A friend of mine who wanted to travel from Cochin to Bangalore on a Monday afternoon found he could not get seats on any carrier till Wednesday morning.

Many people I meet are convinced that there is some kind of cartel operating. An unhappy letter I received from a reader in Hyderabad said that air fares had gone up more than could be justified by the oil price rise and that he was surprised that no one was examining or commenting on how there is a cartel operating.

To support his claim, he said that in the case of Hyderabad-Kochi as recently as April-May this year, the one-way fare was around Rs 3,000, up from around Rs 2,500 in October 2007. The route was served by two flights of Indigo, one direct and the other via Bangalore, as well as by Jetlite, Air Deccan and Spicejet, apart from full-service carriers.

Now, he said, Air Deccan has been withdrawn and replaced by a Kingfisher flight with a fare just around double. Indigo has cut one flight and on any day, the fare on Indigo and Jetlite are almost the same, around Rs 5,000. He says the same has happened between Hyderabad and Kolkata.

But allegations of cartelisation are - predictably - brushed aside as "plain ignorance" by Indian airline CEOs. Bruce Ashby, CEO of IndiGo (formerly with US Airways), patiently explains how it works in the US and why airlines need to be priced roughly the same to stay in business. His argument is that in the US also, on any given day, fares across similar category carriers will be exactly the same. This happens through a mechanism in which airlines are free to adjust their fares three times a day if they see a competitor priced lower.

However, what may hold true for the US may not necessarily hold true for India. Who stops airlines here from colluding on fares when even the laws to prevent such things happening are virtually non-existent? I'm not saying there is a cartel for sure but I can't say I'm certain there is not one either. And I don't really know how ignorant or aware passengers in India are but one thing is certain - they are pretty confused.

Air Deccan To Kingfisher Red

2008-09-11T11:01:00.000-07:00

I can’t help but feel a tinge of sadness for Air Deccan, as we knew it since 2004. As I woke up one morning to see full page advertisements in the dailies announcing the extinction of the yellow and blue common man’s airline and the birth of Kingfisher Red, it was hard not to feel slight regret at what might have been and will now never be.

Air Deccan was launched with the intention of making every Indian fly. Captain Gopinath, whose baby it was, almost ran his airline aground to prove that he truly meant this. The airline bled with absurdly-low fares (one of my favourite ad-lines from the Deccan campaign was “every time we fly, the economy looks up”). Impractical routes, poor management and extraneous circumstances brought the airline to a stage where no one in his right mind was willing to lend any money to Deccan. Passengers complained about the service but flights went full because no one else offered such a deal.

Yet, despite its shoddy service and poor image, I found the airline and what it stood for had seeped into people’s psyche. A number of Indians identified with the airline as “their own”and were willing to forgive and tolerate.

However, market dynamics are not controlled by emotions and in due course Air Deccan gave way to SimpliFly Deccan. (When I told Captain Gopinath that the name was “Simply Absurd” and a mouthful — one that their own announcers at airports don’t bother to elucidate, sticking to the more easy-on-the-tongue Deccan — he defended the change.) SimpliFly Deccan lost some its regular-though-troubled fliers and many employees who no longer felt strongly associated with it (employee morale and identification with Air Deccan was among the highest I have seen).

A day before the announcement of the merger (December 2007), at his house on Vittal Mallya road, I remember Captain Gopinath telling me about how they (he and Mallya) had a shareholders’ agreement in which he was the chairman of the company and Mallya was the vice-chairman and the company was run by professionals at the behest of the board. He said he and Mallya could appoint six directors each and the board would be neutral. He said they were proceeding on trust and that whatever would happen had happened and would continue to happen with his consent. Things however took quite a different turn the very next day.

But if one was to look at what happened objectively, things perhaps turned out for the best. Hard-nosed passengers, for one, gained. With the services of SimplyFly Deccan showing a marked improvement (a fall in cancellations and a better on- time performance), passengers found they got a better deal. Fares may have moved up but that’s true across the board. For whatever the passenger pays, there’s no denying that he gets a better value for money with SimpliFly Deccan than he did with Air Deccan. In fact, many fliers may well prefer the new flashier, more arrogant and more “with it” image that Kingfisher Red promises to deliver because flying is not only about reaching destinations but also about making a statement.

He may have lost his carrier but Captain Gopinath is better off. Even if he had not sold his airline when he did, how would he have managed the latest oil carnage when bankers turned reluctant to lend to the best of the carriers? If he got a decent price then, he may not have got even half of that today. Industry analysts argue that a sale to Anil Ambani may have been better as Vijay Mallya is not known for his ability to create shareholder value but this is merely an academic point today. Shareholders undoubtedly now have more to look forward than they did last year when Deccan was usually in the news for all the wrong reasons.

With oil reaching record highs and competition intensifying, Gopinath’s chances of keeping his carrier afloat would have been more than slim. Employee’s jobs and salaries would have been at stake. Even if the 3100-odd employees feel rudderless today, without the sale, they would have been rudderless and riddled by uncertainty of whether or where their next pay cheque would be coming from. So, employees — if less happy — are probably better off than before.

I still remember the day last December when, outside the Air Deccan head office on the busy Cunningham road in Bangalore, the back-lit common man’s poster that once symbolised the airline was taken down.

That in a nutshell, literally and figuratively, brings us to the end of this story, shareholder agreements notwithstanding.

Domestic passengers carried by Indian Scheduled Airlines in August 2008

2008-09-11T10:27:00.000-07:00

Total passengers carried by domestic airlines in the month of August, 2008 was 29.22 lakhs. The total domestic passengers carried by the Scheduled Airlines of India in the month of July was 30.85 lakhs.

The break-up of passengers carried by the Airlines in August, 2008 is as follows:

Air India (Domestic) – 5.20 lakhs, Jet Airways –7.00 lakhs, Jet Lite – 2.69 lakhs, Deccan – 2.95 lakhs, Kingfisher – 4.29 lakhs, Spice Jet – 2.47 lakhs, Paramount – 0.48 lakhs, Go Air – 0.79 lakhs, IndiGo – 2.98 lakhs, MDLR, 0.06 lakhs.

The percentage share of the carriers in the month of August, 2008 was:

Air India (Domestic) – 18.0%, Jet Airways – 24.2%, Jet Lite – 9.3%, Air Deccan – 10.2%, Kingfisher – 14.8%, Spice Jet – 8.5%, Paramount – 1.7%, Go Air – 2.7% and IndiGo – 10.3%, MDLR- 0.21%.

The seat factors of the domestic airlines in August, 2008 were:

Air India (Domestic) – 56.2%, Jet Airways – 68.3%, JetLite – 63.0%, Air Deccan – 39.0%, Kingfisher Airlines – 59.0%, Spice Jet – 56.8%, Go Air – 70.0%, Paramount Airways – 69.0% and IndiGo – 62.0% and MDLR 73.4%.

Kingfisher plans to raise $400 million.

2008-09-10T12:12:00.001-07:00

Vijay Mallya-owned Kingfisher Airlines, which plans to raise $400 million from private equity investors, may have to settle for structured finance such as sale and leaseback or securitisation of receivables, say private equity experts in Mumbai.

“I am not very sure if Mallya will go for equity, but it’s likely to be structured finance. He will not raise money at such cheap valuations. For equity, the markets need to pick up more. He has fought hard to get to that number (stake),’’ said a senior executive with a private equity player, which has invested in an airline.

The Deccan Aviation stock closed at Rs 88.25 on Wednesday on the Bombay Stock Exchange, down 74 per cent from its all-time high of Rs 335 touched on December 19, 2007. Mallya is merging his unlisted airline firm Kingfisher Airlines into Deccan Aviation after he acquired it in 2007.

UB Group officials were not available for comments but Mallya said in Bangalore that the UB Group is talking to private equity players to raise about $400 million for the airline. With crude oil prices falling and Indian carriers cutting capacity and costs, investors may be keen to come on board.

“We are in discussion with many people as we speak. Many people wrote off the airline industry in India. Suddenly Wilbur Ross appeared and put $80 million into SpiceJet. Kingfisher is a far more compelling proposition than SpiceJet,” Mallya told reporters in Bangalore, after an AGM of group firm United Spirits.

Earlier in August, low-cost carrier SpiceJet announced an investment of $100 million from the US-based private equity firm WL Ross & Co LLC and Goldman Sachs Group Inc, with WL Ross investing over $80 million. Investment bankers in Mumbai said that Mallya may find it difficult to rope in investors.

“The outlook has improved with crude falling but it needs to stabilise. Investors are willing to fund a cash burn of $30-40 million a year but not $400-500 million,’’ said an investment banker.

Passenger loads fell as airlines raised fares to cope with high jet fuel prices. Short-haul routes served by ATRs have been hit hard as travellers switched back to cheaper modes such as rail and road.

In December 2007, United United Breweries (Holdings), Mallya’s holding company, raised Rs 600 crore through a qualified institutional placement at Rs 1,110 per share. The airline has also been funding itself with sale and leaseback deals, cashing in on attractive aircraft deals it had entered into with Airbus.

A few specialised airlines investors such as Texas Pacific Group, Indigo Partners and Capital International are still keen on investing in India. Capital had invested in Deccan Aviation, which ran budget carrier Air Deccan before Mallya bought it.

“Investors will come in once the outlook becomes more stable. Private equity people like to think they are in control,’’ added a private equity manager. Mallya will have to wait for “good times” to return to take investors on board.

UB, Heineken in talks to resolve shareholder pact

2008-09-10T11:58:00.000-07:00

United Breweries (UB) Ltd is in talks with Heineken to resolve the issues of “conflicting interests” and draft new shareholders’ agreement, Vijay Mallya, chairman, UB group, said. Addressing the shareholders at the company’s annual general meeting, Mallya said, “We are currently in discussions with Heineken to remedy the conflict of interest situation, where Heineken is a majority shareholder of Asia Pacific Breweries (APB).”

Meanwhile, several potential strategic investors were eager to purchase a stake in UB’s spirits business United Spirits Ltd (USL). “A minimum of three strategic investors, from international companies have approached UB for USL,” Mallya said. “There is a lot of interest from strategic investors in USL because they all know I have the treasury stocks,” he added.

A new agreement with Heineken will be drafted after the two companies arrive at a mutually acceptable solution. “We are exploring various options. The best of agreements take some time (to happen),” he told the media. Heineken, which obtained a stake of 37.5% in UB after acquiring Scottish and Newcastle, also held a stake in UB’s rival beer maker APB, which owned Tiger Beer.

He said that Heineken could benefit in India from UB’s domestic distribution network, while UB in turn could leverage the former’s global market reach. “Kingfisher has huge brand recognition outside India, but we have not been able to fully leverage that in our sales,” Mallya pointed out.

About UB’s aviation business, Mallya said that the company was in talks with various private equity players to raise $400 million for Kingfisher Airlines. “I have always preferred the public route to raise capital, but you cannot exclude the private route. Each has its merits,” he said.

Kingfisher Airlines, which launched international operations on September 3 with its London- Bangalore service, was also talking to several airlines for code-sharing arrangements, he said.

Mallya said that the board of directors of UB had approved an interim dividend of 15% for its shareholders.

Airlines battle to corner global corporate traffic

2008-09-08T22:09:00.000-07:00

MUMBAI: With Kingfisher Airlines joining Jet Airways and Air India on international routes, the fight for high-yielding international corporate traffic has taken off.

Attracting business traffic is important because, on long-haul international routes, corporate traffic — much of which flies on the high-yield business class seats — is key to ensuring profitability.

Sudheer Raghavan, chief operating officer, Jet Airways, said one of the segments the airline looked at when it went international was the Indian diaspora. “Now that we have established ourselves with that segment, our focus is on signing up corporates. We have about 2500 corporate deals across the world with various companies. Most of these companies also have a presence in India,” he added.

According to Jet executives, nearly 450 of these deals are with business houses based outside India.

Hitesh Patel, executive vice-president, Kingfisher Airlines, said the airline will target international corporates. “We have extensive corporate partnerships in India. We having just launched our international product… we are working on such deals, especially in the United Kingdom.” Sources indicate the airline is talking to various IT players, especially for its Bangalore-San Francisco route.

Air India, the nation’s flag carrier, refused to divulge details of its corporate deals outside India. Jitender Bhargava, executive director, said, “We don’t compile a list of individual deals. But we work on such deals from all our international offices. From India, we have a huge contract with TCS, which is our biggest corporate deal.”

Marketing departments of airlines offer heavy discounts and other perks to attract corporates. The discounts could often be as large as 30-50%. Sweeteners like free upgrades and flexibility in travel plans are also thrown in. Add airport transfers and baggage allowances, and such deals present a tempting offer for corporates.

Mark Martin, senior advisor-aviation, KPMG, said it is a sound strategy to go for corporate deals. “It means you are assured of traffic, even if you have to keep your margins slightly thin by offering discounts. The game is one of retention,” he explained.
Such a strategy also means Indian carriers have to woo frequent fliers of other airlines.

This is often difficult because most travelers have long-term relationships with airlines.
But airlines are looking for ways around the problem. Says Raghavan, “In Shanghai we are members of Asia Miles - the main proponent of which is Cathay Pacific. A Chinese gentleman can fly on Jet Airways and still earn Air Miles. So we are leveling the playing field.” Jet is also part of the Lufthansa-led Miles and More, a similar multi-airline frequent flyer program.

But are these enough to compete with entrenched players who have long standing relationships with international carriers?

An analyst said, “What is to the advantage of Indian carriers is that they have a reputation for warmth and service. Ultimately, you need to have a very good product to attract business traffic. Indian carriers are starting to build that reputation.”