Singapore: Kingfisher Airlines has gone from bad to worse. The latest setback is a three-day suspension of services at the Indian carrier. But the worst outcome - liquidation - would help no one.
The airline has long had too much debt, $1.4 billion at the last count, and sustained losses. Labour relations have been fraught, so the refusal by engineers to certify the airworthiness of the stripped-down fleet of 12 aircraft is not a total surprise. But it has pushed the carrier close to the brink. The civil aviation minister has said he could revoke the airline's licence - it is supposed to operate at least five aircraft.
The worst can probably be avoided. The airline says there is no threat to the operating licence and Kingfisher has every intention to restart services in a few days. The company's flamboyant founder Vijay Mallya is in talks to sell a stake in his liquor business, United Spirits, to Diageo Plc to find enough funds to keep Kingfisher in business. Creditors want more equity from Mallya or from an outside strategic investor.
02/10/12 Reuters/Indian Express
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The airline has long had too much debt, $1.4 billion at the last count, and sustained losses. Labour relations have been fraught, so the refusal by engineers to certify the airworthiness of the stripped-down fleet of 12 aircraft is not a total surprise. But it has pushed the carrier close to the brink. The civil aviation minister has said he could revoke the airline's licence - it is supposed to operate at least five aircraft.
The worst can probably be avoided. The airline says there is no threat to the operating licence and Kingfisher has every intention to restart services in a few days. The company's flamboyant founder Vijay Mallya is in talks to sell a stake in his liquor business, United Spirits, to Diageo Plc to find enough funds to keep Kingfisher in business. Creditors want more equity from Mallya or from an outside strategic investor.
02/10/12 Reuters/Indian Express
