India's struggling Kingfisher Airlines is banking for survival on an expected government decision to allow foreign airlines to pick up stakes in domestic carriers.
But experts say this may not be enough to save the cash-squeezed company.
Its shares surged last week on hopes that the cabinet could soon agree to give foreign carriers the green light to invest -- a move that could throw a lifeline to the airline controlled by billionaire liquor baron Vijay Mallya.
But Kingfisher, which has never made a profit since it was created in 2005, is in urgent need of as much as $600 million to stay in business, the Centre for Asia Pacific Aviation, a consultancy firm, said.
"Without these funds, its survival is extremely challenging," said CAPA's South Asia chief executive Kapil Kaul.
Kingfisher, which has shut down its overseas operations and slashed domestic flights, desperately needs the cash infusion to pay the millions of dollars it owes to suppliers, lenders and other creditors. Mallya is strongly rooting for the new foreign direct investment (FDI) policy which could be Kingfisher's last chance of survival.
15/04/12 Salil Panchal/NY Daily News
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