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Kingfisher Airlines CEO: No risk to future or long-term viability; restructure to fleet/routes

14-Nov-2011 9:24 AM

Kingfisher Airlines CEO, Sanjay Aggarwal, made (12-Nov-2011) the following statements regarding the airline's network, fleet, debt status and other issues:  

  • Fleet: To counter high costs and lower yield levels, the airline has decided to rationalise its network, drop unprofitable flights and expedite its fleet reconfiguration. The reconfiguration initiative will require up to three aircraft to be out of service over the next three months at any one time for this exercise to be completed. It will reduce the number of fleet configurations from seven to three, improving operational flexibility. This initiative will add more seats to its fleet, improving revenue production of each aircraft;
  • Network: Kingfisher Airlines has rationalised its network to offer "maximum and seamless connectivity". As per the revised schedule, it will offer 300 daily flights connecting 54 cities, a reduction from the previous schedule of 340 flights. All passengers booked on relevant flights have been notified;
  • Cancellations: Kingfisher Airlines has not cancelled flights "due to lack of pilots or other staff" and the carrier has sufficient number of pilots and a "robust pipeline of new pilots" to continue to operate its scheduled flights. The airline has suffered gradual attrition of 100 pilots. India legislation requires the Indian Directorate General of Civil Aviation (DGCA) to be informed if there are flight cancellations for a extended period of time. Kingfisher has only announced cancellations until 19-Nov-2011 but did not inform the DGCA;
  • Debt and salaries: Kingfisher has credit terms or payment arrangements with all its vendors which it is complying with. The carrier has suffered a few days delay for the last two to three months in payment of employee salaries. However, all employees have been paid in the month the salaries were due;
  • Bail out: Kingfisher has not made any bail out request to the Government. The carrier has requested its banks increase limits due to "significant increase in operating costs caused by increase in fuel prices and rupee devaluation";
  • Long-term outlook: Kingfisher does not see any risk to its future or long-term viability. [more - original PR]