Kingfisher Airlines : IT : KFR

vonrichthoffen a écrit: L'Inde se trouverait sur une autre planète que Toulouse ou Derby ?
Ca ressemble surtout à des temps de chauffe non respectés, par exemple des temps de taxi relativements courts sur un moteur puis décollage immédiatement derrière, le tout avec des avions à la couenne en terme de payload.

The [Vous devez être inscrit et connecté pour voir ce lien]has issued an [Vous devez être inscrit et connecté pour voir ce lien] calling for immediate inspections of[Vous devez être inscrit et connecté pour voir ce lien], -3B and B1 engines for potential fan disk failure, following the discovery of parts from the shattered engine which broke apart in mid-air while powering a [Vous devez être inscrit et connecté pour voir ce lien] on 25 January (2007).

Inspection of the parts, which were recovered from countryside southwest of Denver, Colorado, indicated that the fan disk was caused by a crack which had developed in the bore of the disk itself. Close inspection of the pieces revealed this had been caused by an electrical arc-out defect which left a blemish on the inside of the bore.

The ailing Indian carrier has been quick to blame IAE for its recent engine troubles on its A320 fleet, yet hasn’t had the nerve to look a little closer to home

The first question that will be asked is why the airline even needs to blame anyone much less seek compensation.

What is Kingfisher Airlines’ engineering staff paid for when they are unabl lui at moi avons lme to check engines for signs of degradation and other high cycle wear-and-tear issues and just how exactly is IAE culpable for this oversight?

Further, if it’s about compensation, just what will Kingfisher Airlines be doing to compensate the Hindustan Petroleum Corp or the Airports Authority of India for its lack of payments over countless months for fuel and other logistical ground support at airports around the country?

IAE engines have been in service for years, accumulated millions of cycles and flight hours and has proven to be not just one the most popular engines for the Airbus A320 family, but also a design that has improved with age

• sauf erreur ou omission de ma part, il n'y a pas encore de choix de moteur pour les 21 restants ; il convient de réfléchir aux raisons derrière cela (il y a de nombreux facteyrs qui "jouent") :
  
  
• SUH n'a pas fait ce choix parce qu'il est pressé ; chez ILFC, il avait bâti une position de client "leader" chez IAE ; il connaît toutes les qualités du moteur IAE V2500 et ses caractéristiques de "valeur sure" dans les flottes des monocouloirs d'Airbus ;
  
  
• SUH /ACL n'ont demandé aucune convertibilité pour les avions concernés en 'appareils à NEO' ; les opérations éventuelles de NEO ne l'intéressent pas ; à tort ou à raison, il n'y croit pas ;
  
• 
  
• les Adeptes du DPO, des affairmations & opinions infondées, d'idées reçues, et propagande anti-IAE (ou anti-RR, au sein d'IAE) n'ont pas d'argument pour contrer SUH/ACL ; de toutes façons, là, ils se rendraient compte qu'ils ne font que 'peter contre le tonnerre' ; car le marché n'écoute pas ces Adeptes-là, ... qui causent ; il écoute ceux qui ont "put their money where their mouth is" / 'ont mis leur billes là où ils ont mis leurs paroles' !
  
• 
  
• dans le marché, sur toute la planète, les actions de l'entrepreneur qui a "misé ses milliards" comptent bien plus que les paroles & lamentations des Directeurs de ceci ou de cela, qui engagent l'argent des autres ;
  
• comme référence à suivre, SUH / ACL pèse bien plus lourd qu'AF-KLM, ou les dirigeants d'AF, qui sont en train de s'approcher de la retraite.
  

(although where it goes after the re-engining debate is another matter entirely).

Kingfisher Airlines has unanimously been voiced as India’s most poorly run airline, proving that a 5-star rating in the functional world means very little when you can't even stop your own airplanes from being seized because you can't choose between paying your lessors or paying your staff.

In its rampant rush to circumvent the five year domestic rule to fly internationally, taking over Deccan Air and now bit hard on the proverbial behind by high fuel and operating costs, Kingfisher Airlines lost its way long ago and shows zero sign of penance.

Given the utter disarray of the Indian airline scene, Kingfisher Airlines should be grateful that it was selected ahead of other rivals like IndiGo and Paramount to step into the oneworld alliance – and even then the alliance only wants domestic access to India’s many gateways, not because Kingfisher Airlines is a “good airline” – far from it.

IAE won’t (and shouldn’t) cough up any expiation for the failings of Kingfisher Airlines – the sooner this abject airline realises that the better.

FERGUSON a écrit:Merci

Pas d'amalgame, d'accord mais :
Il n'empêche que VM se traine une réputation de très mauvais payeur comme il a été écrit ici car c'est la stricte vérité.

J.Leahy se débrouille pas mal, car il connait bien le bonhomme, comme certains ici ( qui ne sont pas JL )

Il a des ardoises à peu prêt partout, c'est avéré.

Concernant la remontée d'info lors d'un entretien programmé sur V-2500, elle date des derniers jours de 2009, ne vient pas du tout de KF et ne mettait pas en cause l'intégrité globale du moteur ( 500 inspectés dans le monde, moins d'une dizaine ne correspondant pas aux critères de safety rules exigés notamment par Rolls Royce, fix développé en trois semaines, déploiement de ces fix pratiquement terminé aujourd'hui. Dans ce timing, on voit bien qu'il n'y avait aucun caractère hyper urgent sur un problème hyper dangereux : si les mêmes traitements étaient appliqués aux CF-6, par exemple, les MRO facilities exploseraient ! )

Je comprends la façon de dire du journaliste, s'il connait la méthode VM !

Kingfisher defers delivery schedule of superjumbo A380s

NEW DELHI: Kingfisher Airlines on Thursday said it has deferred the delivery of superjumbo Airbus A380 and induction of other aircraft like A330 and A320.

"We have deferred the delivery schedule of A380, which was expected to begin next year. Delivery of other aircrafts like A330s and A320s, has also been deferred," Vijay Mallya, Chairman of the airline, said at a CII conference here.

The airline has placed orders for a total of 67 aircraft, which includes, five A380s, 42 A320s and 15 A330s.

In this context, he said Jet Airways had also leased several of its Boeing 777s to other global carriers and termed the decisions to defer deliveries or lease out planes as "day -to-day business decisions" to maintain capacity induction in the right perspective.

Mallya also said that the fund raising plans for the airline was on schedule, when asked about reports that plans to raise USD 200 million through an issue of global depositary receipts (GDRs) has been put on hold.

"All GDR plans, fund raising, are bang on target," he told reporters on the sidelines of the conference.

Talking about the dues of oil marketing companies for supply of air turbine fuel (ATF), Mallya said "We have given them (oil marketing companies) a lot of money... we do not have any overdues", but refused to comment any further.

Last week, Hindustan Petroleum Corporation Limited's CMD Subir Roy Choudhury had said that Kingfisher still owed Rs 220 crore to the company and the fuel supply to the airline continues to be on a cash-and-carry scheme.

The loss-making private air-carrier was put on the cash and carry basis by the state-run oil marketing company some months ago after it failed to provide bank guarantee cover against payment defaults.

HPCL is Kingfisher Airline's largest aviation turbine fuel (ATF) supplier. The airline buys over 1,300 kilolitres of jet fuel to the tune of over Rs 130 crore every month.

Talking about the domestic aviation sector which was now getting back to shape, Mallya said that it was for the government to ensure that the industry was healthy and safe as "it has much larger stake and it owns nearly all the banks who have lent to the domestic aviation industry, which is unique."

Last month, the RBI allowed banks to recast debts of the airline companies like Jet Airways, Kingfisher and Air India, whose combined debt is estimated to be over Rs 60,000 crores.

He said the government should "reasonably tax" the airline industry to ensure that they had a fair return on their investments.

Expressing disappointment over India not having a comprehensive civil aviation policy, Mallya said "the Civil Aviation Ministry had prepared the plan 18 months ago but meeting of the Group of Ministers (GoM) on the issue has not taken place. There is very little the industry can do".

Kingfisher reworks plane purchase plan

Vijay Mallya’s Kingfisher Airlines has decided to change its earlier fleet acquisition plan. Though it aims to more than double the size from 66 to 137 aircraft by 2015-16, it does not now plan to induct Airbus 380s. The airline also does not plan to add Airbus 350s.
In the next financial year, Kingfisher plans to add nine aircraft — six A320s, two A330s and one ATR. Of these, the airline will take eight directly from the market. It plans to add 14 aircraft in 2012-13, 20 in 2013-14, 16 in 2014-15 and 13 in 2015-16.
When asked about the new delivery schedule of A380s, an airline spokesperson refused to talk on the issue. An email to the airline did not elicit any response.

Kingfisher is the second-largest airline in India in terms of passengers carried and operates around 375 flights a day to 71 destinations in India and abroad. It is also the only listed carrier to have not turned profitable; it reported a net loss of Rs 1,647.2 crore in the financial year ended March 2009. It reported a net loss of Rs 187 crore in the first quarter of this year and Rs 230 crore in the second quarter.
Taking steps to reduce costs and generate revenue, it has discontinued free food on Kingfisher Red, its low-cost operation, which accounts for up to 75 per cent of its capacity.
Kingfisher also expects to phase out its 100-odd expatriate pilots in 2011-12 and 2012-13. It also plans to induct aircraft only on operating leases and outsource all big maintenance contracts.
Kingfisher recently restructured its debt of over Rs 7,000 crore. The restructuring included converting about 30 per cent of total bank debt into capital and converting a loan of Rs 735 crore from UB Holdings, the parent company, into equity.
The debt restructuring exercise included Rs 900 crore of additional facilities by banks. The airline also plans to raise about $1 billion, including $250 million from global depositary receipts.

Kingfisher may cancel A380 and A350 orders

The delivery of these planes was to start from 2014.
The UB Group-controlled Kingfisher Airlines may cancel its orders for Airbus A380s and A350s or swap these planes for smaller planes like A320s and A330s.
"We are reviewing our purchase plan of A380s and A350s. With our airline joining the Oneworld Alliance, we do not need these ultra long-haul aircraft any more. However, we have not started any negotiations with Airbus now," said Kingfisher Chief Executive Officer Sanjay Aggarwal.
In 2005, Kingfisher became the only Indian airline to have ordered five A380s, but has deferred its deliveries once. These jumbos were to scheduled to join the airline in 2011 but were deferred till 2014.
The airline also ordered five A350s ultra long-haul aircraft in 2005 and the deliveries of these aircraft were to start from 2015.
Kingfisher is set to get global presence by joining the Oneworld Alliance by the end of 2011. This entry will give the airline a network of 11 airlines in its fold, covering 870 destinations across 146 countries and over 9,300 daily flights. The alliance also carries 335 million passengers on a combined fleet of over 2,400 aircraft.


Kingfisher Airlines has also chalked out a plan of doubling is fleet size from 66 to 137 aircraft by 2015-16. In the next financial year, Kingfisher plans to add a total nine airplanes – six A320s, two A330s and one ATR aircraft. Out of the nine aircraft, the airline will take eight aircraft directly from the market. The airline will add 14 aircraft in 2012-13, 20 in 2013-14, 16 in 2014-15 and 13 in 2015-16.
Currently, Kingfisher operates around 375 flights a day to 71 destinations in India and abroad and is looking at expanding its domestic network.
The airline is also the only listed carrier to have not turned profitable and reported a net loss of Rs 1,647.2 crore in the financial year ended March 2009. In the current financial year, it has reported losses of Rs 187 crore in the first quarter, Rs 230 crore in the second quarter and Rs 254 crore in the third quarter, though the performance was better as compared to the previous quarter.
Meanwhile, the carrier is also taking various steps to reduce costs and generate revenue. The airline has introduced Food for Purchase on their low-cost operations Kingfisher Red, which constitutes up to 75 per cent of their capacity.

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Kingfisher also expects to phase out expat pilots evenly in 2011-12 and 2012-13. At present, the airline has around 100 expat pilots flying for them.
With approval from banks, Kingfisher Airlines recently restructured its debt of over Rs 7,000 crore. The restructuring package include converting about 30 per cent of the total debt by banks into capital and converting a loan of Rs 735 crore from parent company UB Holdings to the airline into equity.
The debt restructuring exercise also calls for Rs 900 crore of additional facilities to be provided by banks to the airline and plans to raise funds of about $1 billion, including a $250-million GDR issue.



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Kingfisher Airlines is in no hurry to take delivery of five Airbus A380 superjumbos it has on order and could push their arrival beyond 2016, Kingfisher chairman Vijay Mallya told reporters.

Ceci résume bien le bonhomme, tel que nous le voyons depuis des années, .... dans le domaine public, ... n'est-ce pas ! ?

India's second-busiest airline is also holding off making a decision on which enginns to put on the A380, postponing a choice between Rolls-Royce and a group led by General Electric and Pratt & Whitney.

"We haven't decided the delivery dates yet," Mallya said in an interview, asked when the USD$350 million jets would be in service.
Pressed on whether it would be in 2016, he said: "That, I would say, is the earliest. We don't really need that kind of capacity right now. Five is a lot of seats to fill."

Loss-making Kingfisher was reported earlier this year to have delayed taking delivery of the 525-seat airliner for a second time until 2016, from an original date of 2014.

The aircraft has been hit by over two years of production delays but the setback suits some airlines whose cash flows have been squeezed by the financial crisis and high oil prices.

Asked about the choice of engines, Mallya said: "There are two engine choices available, we haven't decided which one we are going to go for."

(Reuters)

Nos Forumistes ont, surement, des anecdotes intéressantes, au sujet de Kingfisher !

Kingfisher Looking To Lease More Aircraft

India’s Kingfisher Airlines is looking to lease both wide-body and narrow-body aircraft to meet an unanticipated surge in demand as the domestic economy recovers more quickly than expected, the company’s chairman, Vijay Mallya, said on Monday.
Mallya also told reporters on the sidelines of the International Air Transport Association’s annual meeting in Singapore that the company had revived a plan to sell Global Depository Receipts, taking higher oil prices into calculation.
Asked if Kingfisher’s current capacity was enough to cater to the projected increase in demand, he said: “Not quite, that is why we are looking for leased capacity.
“Kingfisher at one time had several aircraft that were on order from Airbus for delivery in 2010 and 2011. During the 2008-2009 crisis, I actually postponed the delivery of those aircraft to 2012 and 2013,” Mallya said.
“So right now we are looking for capacity, but our own new deliveries will start in about 18 months”. He said he was looking to lease both narrow-body and wide-body aircraft.
“We have been experiencing for the last six months unprecedented load factors, which I have never seen in the last six years,” Mallya said. “We are running at mid to high 80 percent on every flight, which is extremely healthy.”
According to its website, Kingfisher has 66 aircraft, mostly Airbus jets and ATR turbo-prop variants. It has more than 125 planes on order.
Loss-making Kingfisher, India’s second-largest airline by market share, has restructured its debt by converting almost 12 billion rupees ($268 million) of loans into equity. Its current debt stands at about 60 billion rupees.
Last month, it reported a net loss of 10.27 billion rupees in the fiscal year ending March 31, versus a loss of 16.47 billion rupees the year before.
But it had positive earnings before interest, tax, depreciation and amortisation (EBITDA) amounting to 1.4 billion rupees, the company says.
“We reported significantly improved numbers and EBITDA profit for the first time. This is a sign of things to come,” Mallya said.
He said the company had also revived a proposal to sell GDRs of $250 million-350 million, but gave few details.
“We had an excellent roadshow for our GDR in January and early February this year and we presented a compelling business plan”. He said the plan assumed crude oil at $90 per barrel. “The minute crude oil prices started going up to $120 plus per barrel, prospective investors asked us to rework our business plans, which we did.”
LEVERAGING ONEWORLD ALLIANCE
Mallya said Kingfisher’s growth should be enhanced as it joins the Oneworld airline alliance, which also includes Cathay Pacific, British Airways and Qantas.
“The opportunities to leverage this alliance are huge,” he said, adding that Kingfisher would become a fully operational member by 2012. “We see this as being a contributor of about 5-6 percent of enhanced revenue to us.”
He said Kingfisher was continuing to lobby the government to allow foreign airlines to take stakes in Indian carriers.
“Airlines in India must raise capital and the opportunity to raise capital from foreign airlines must not be excluded and that’s why we will continue to request the government of India to reconsider its foreign direct investment policy.”
Kingfisher flies to eight international destinations and to more than 50 towns and cities in India. Its fleet of turboprop aircraft will help it to respond to the pattern of wealth creation in India, Mallya added.
“There is a lot of wealth in tier-2 and tier-3 cities that is being created,” he said. “It is no longer a situation where wealth in India is restricted to the big metro cities, so it offers a huge amount of opportunity.
“Kingfisher is well positioned because it has a large number of ATR aircraft which are ideal to service the emerging demand in tier-2 and tier-3 cities,” he said.

India's Kingfisher Airlines plans to exit its low cost business and focus on the premium model, chairman Vijay Mallya said, in what will be a marked shift in an industry where most carriers are betting on the low-cost space.

Kingfisher, run by the flamboyant Mallya who also heads the UB group, operates the low cost arm under Kingfisher Red.

"We are doing away with Kingfisher Red because we do not wish to compete in the low cost segment," Mallya told reporters on the sidelines of Kingfisher's annual general meeting.

"We believe that there are more than enough guests who prefer to travel the full service Kingfisher class and that shows through in our own performance where load factors in the Kingfisher class are more than Kingfisher Red".

Indian airlines have aggressive growth plans, with orders worth USD$50 billion in the pipeline to Airbus and Boeing as growing economy spurs business travel and low-cost carriers make air travel affordable for a growing middle class.

But cutthroat competition and rising costs, including for fuel, means most big Indian carriers are loss making, with state-owned Air India operating on government life support.

"The margins of Kingfisher class are higher than Kingfisher Red. That's because the yields are better," Mallya said.

Kingfisher's move marks a departure from the current trend in Indian aviation which has seen full service carriers such as Jet Airways increasing its low cost operations.

Jet, India's largest carrier by market share, had said last month that it aims to increase domestic low-fare capacity to 80-85 percent of the total fleet from the present 72 percent.

Kingfisher is working with a consortium of banks to further reduce interest costs and raise working capital as the carrier looks to restructure its fleet by selling and leasing back some of its aircraft to lower debt, Mallya said.

"The high cost of ATF (aviation turbine fuel) coupled with a weakening rupee is the biggest challenge that the whole aviation industry in India is currently dealing with and we are no exception," Mallya said in his speech at the shareholders' meeting.

Shares of Kingfisher Airlines have lost about 63 percent in value in a year, with the company suffering losses on high oil prices and intense domestic competition.

The airline's auditors had said in the company's annual report for the fiscal year ended March 31, that it needs capital infusion to remain viable.

The auditors B.K. Ramadhyani also noted, that the airline's financial statements had "been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded."

The airline continues to work aggressively to raise fresh capital, Mallya said, admitting it would not be an easy task.

The airline also plans to convert part of its rupee loans into low-cost forex loans based on existing cash flows, he said.

The airline, which operates 370 flights a day, expects to increase its capacity by 10 percent by reconfiguring its aircraft which will significantly improve revenues, he said.

Kingfisher had planned to raise USD$250 million - USD$350 million through an issue of global depositary receipts in January, but no deal has been forthcoming.

The company also tried to bring in private equity investment in 2008 and 2009, but was not successful.

In late August, Kingfisher said its board approved a rights issue of shares to raise up to INR20 billion rupees (USD$411 million).

The airline has not reported profit since going public in 2008 through an acquisition. It has posted cumulative losses since then of INR42.83 billion rupees.

Earlier this year, Kingfisher cut its debt through a restructuring by issuing shares to 14 banks. Now, the banks including State Bank of India and ICICI Bank together own 29 percent of Kingfisher.

This exercise converted almost INR13 billion rupees of loans into equity and its debt now stands at about INR60 billion rupees.

Funds worth INR7.45 billion rupees, injected by founders, were also converted into share capital, Mallya said.


(Reuters)

Kingfisher Protests Rumors Of Imminent Shutdown

India’s debt-ridden Kingfisher Airlines is rejecting speculation that it soon will shut down and instead is taking steps it hopes will enable the carrier to turn a profit.

Chairman Vijay Mallya, after announcing a second-quarter net loss of 4.69 billion rupees ($94 million), tried to stem worries about the carrier’s future by saying all airlines in India are operating in a tough environment. “Other airlines were making losses too. To write the epitaph for Kingfisher Airlines constantly is neither fair nor accurate,” he said.

Kingfisher has not asked the government for a bailout, Mallya says, but rather wants lenders to inject working capital of about 8 billion rupees ($158 million) as short-term relief.

“Our demands with the banks are mainly two-fold: One is to meet short-term capital needs, which have gone up, and concession on interest [rates],” Mallya said. The airline restructured its debt earlier this year by converting about a third of its loans into shares and issuing them to lenders and founder companies. In September, the airline closed its low-cost operation, Kingfisher Red.

Mallya, chief of the United Breweries Group, which runs Kingfisher, also called for the government to allow foreign airlines to buy stakes in Indian carriers.

“We need equity to improve ... [our] balance sheet, not just Kingfisher but the entire industry,” he said.

He said the company has cleared all debts owed to the two state-owned oil companies, Indian Oil and Bharat Petroleum, and has applied for permission to import fuel. If the carrier can import the fuel directly, it will not have to pay sales tax on the fuel.

Kingfisher has become one of the main casualties of high fuel costs and a fierce price war by a handful of airlines which, between them, have ordered hundreds of aircraft for delivery over the next decade in an ambitious bet on the future. Reuters reported earlier this week that Kingfisher has pushed off delivery of the five Airbus A380s it has on order to an unspecified date at least five years in the future.

Mallya says Kingfisher Airlines has initiated a large-scale aircraft reconfiguration and transition to the full-service model. “This would enable a greater number of seats in the air within the current costs and increase the choice of flights for our premium guests.”

Other actions taken include network rationalization, steps to reduce interest costs and a streamlining of existing fleet orders.

NEW DELHI -- Cash-strapped Kingfisher Airlines Ltd. has defaulted on 1 billion rupees ($19.5 million) of payments to the Airports Authority of India, prompting the state-run airport operator to ask for more bank guarantees.

"We have already encashed 1 billion rupees worth of guarantees given by Kingfisher against its dues," Airports Authority
Chairman V.P. Agrawal said late Monday. The authority has sought additional bank guarantees from Kingfisher to cover its remaining arrears of 2.17 billion rupees, he said.

Indian Airlines Struggles With Deep Troubles

Although spiraling jet fuel costs, plummeting profits and high debt levels are threatening the survival of its domestic carriers, India’s burgeoning demand is expected to pull the beleaguered aviation sector through the current turbulence.

Among the country’s six major airlines—Jet Airways, Kingfisher Airlines, SpiceJet, Indigo Airlines, GoAir and national carrier Air India—only discount carrier Indigo is making a profit. Kingfisher Airlines, which calls itself “King of Good Times,” lost its scepter and throne to high fuel costs and the price war among airlines. Its shortage of cash hinders its ability to buy fuel and pay salaries, airport charges and interest to its lenders.

In November, Kingfisher was forced to cut several unprofitable flights from its network in an attempt to reduce losses, given high fuel costs. The airline, owned by billionaire liquor baron Vijay Mallya, has been talking with lenders to raise capital and trim $1.2 billion in debt. It posted a second-quarter net loss of 4.69 billion rupees ($90 million), compared with a net loss of $44.5 million a year earlier.

The airline’s debt hit rock bottom in October and state-run oil refiner Hindustan Petroleum Corp. Ltd. temporarily suspended fuel deliveries to Kingfisher Airlines for the second time in four months. To add to its woes, the New Delhi and Hyderabad airports threatened to deny the airline credit and demand upfront cash payments for using their facilities.

The heavy losses also forced Kingfisher to shut its no-frills segment, Kingfisher Red, in September.

Similar problems have befallen other Indian carriers. Jet Airways, India’s top airline by market share, posted a net loss of $138 million for the quarter ended Sept. 30, compared with $2.4 million a year ago. Budget airline SpiceJet also reported a net loss of $46 million. State-run Air India, which has a cumulative debt of $7.7 billion from aircraft acquisitions and short-term loans to maintain its operations, has been asking for a total of $3.2 billion.

The Center for Asia Pacific Aviation (CAPA) predicts a $2.5-3 billion loss for Indian airlines in the fiscal year ending in March. According to CAPA estimates, the cumulative debt burden of the three big Indian carriers—Kingfisher, Air India and Jet Airways—was a whopping $16 billion. “Indian banks have an exposure of $6 billion related to working capital and term loans. They will have an additional exposure on the aircraft-related financing,” says Kapil Kaul, South Asia chief executive of CAPA.

There are several reasons why India’s aviation industry, once the symbol of economic growth, is in turmoil. While India is among the countries with the fastest-growing passenger traffic, high fuel costs and the inability to raise fares have resulted in huge losses over the past three quarters. The steep increase in global oil prices hits Indian carriers particularly hard because they must pay government fuel taxes at rates up to 30%. Airlines complain that fuel prices are almost double global rates and account for 40-45% of operational expenses, compared to 18-20% abroad.

The increasing sales tax on air tickets also negatively affects the country’s civil aviation industry. Despite campaigns stating that the tax flouts International Civil Aviation Organization (ICAO) policies, the Indian finance ministry extended the sales tax to all classes of domestic and international airline tickets. Previously, the tax was only levied on international premium-class tickets.

High salaries for pilots and crewmembers also drive up carriers’ costs, even though there was no rapid hike in salaries after the recession in 2009.

While costs have increased, revenue has decreased for many of the Indian airlines. They boosted capacity by leasing more aircraft and opening new routes, which caused per-seat profits to nose-dive. The carriers also added expensive aircraft to their fleets too quickly without putting their balance sheets in order for tough times.

On top of this, the depreciation of the Indian rupee has resulted in bulging costs.

To stay afloat, Kingfisher Airlines and Jet Airways both need infusions of capital, according to their respective auditors. B.K. Ramadhyani & Co., which audits Kingfisher, says the carrier’s ability to meet its financial obligations is “dependent on the company’s ability to infuse the requisite funds.” Similarly, auditors Deloitte Haskins & Sells and Chaturvedi & Shah say raising funds is essential if Jet Airways’ accounts are to be prepared on a “going-concern” basis in the future.

Jet Airways plans to give $9.6 million of interest-free loans to its JetLite unit by the end of March as an immediate measure to enable the unprofitable subsidiary to continue operating.

Even Kingfisher tried to stem worries about its future by listing a few options that could help it through the turbulent times. Mallya says the airline’s net worth has eroded, but it has not asked for a bailout from either the government or banks. Rather, it wants lenders to inject working capital of $154 million as short-term relief. The airline restructured its debt earlier this year by converting one-third of its loans into shares and issuing them to lenders and founder companies.

Mallya says the airline has initiated a large-scale aircraft reconfiguration and transition to a full-service model, along with network rationalization, to reduce interest costs and streamline existing fleet orders.

Rationalizing their operations is something the airlines can control, but another major challenge—outdated infrastructure including shoddy runways and air traffic management systems that desperately need upgrading—is beyond their control.

India’s government could provide relief for its domestic airlines if it reduced the high jet fuel tax and opened the aviation sector to investment by foreign airlines, which could not only bring in funds but also help improve management practices.

There is hope of government support for the struggling carriers. “The private-sector airlines have to be managed efficiently but if they do get into difficulties, we have to find ways to help them,” Prime Minister Manmohan Singh says.

India’s commerce and industry minister, Anand Sharma, says a civil aviation ministry proposal to assist the strapped airlines is “receiving government’s active consideration.” Some analysts think it is highly likely to approve it soon.

“The Indian government will have to eventually open up the sector, but to what extent is not yet clear,” Dhiraj Mathur, aerospace executive director at PricewaterhouseCoopers, tells Aviation Week.

Currently, Indian law permits up to 49% foreign investment in airlines and more in airport infrastructure. However, foreign airlines are not allowed to invest in the sector, something Kingfisher’s Mallya is calling for the government to change.

Not everyone agrees with Singh’s support of the carriers, though. Among them is Ajay Lele, a former Indian air force wing commander who works with the New Delhi-based Institute for Defense Studies and Analyses. “The airlines are responsible for their own mismanagement and need to deal with it themselves,” Lele tells Aviation Week.

He says Indigo is generating profit and growing rapidly because of efficient management and prudent fund-raising.

“The private industry cannot have an extravagant life and rely on the government to take care of their losses. It already has Air India to take care of,” Lele says.

The government is considering a variety of plans to restructure Air India—a relic of state ownership that is threatened by losses, bloated costs and severe competition from the private domestic airlines. India’s central bank is expected to submit a report this month recommending a fresh turnaround plan for the national carrier, which incurs monthly losses of more than $115 million in addition to its deep debt from aircraft acquisitions and short-term loans to maintain operations.

In the past two years, the government has pumped $482 million into Air India, and the ministerial panel is looking at injecting another $1.2 billion over the next 10 years.

The silver lining if the dark cloud hanging over India’s civil aviation sector is that government figures show an increase in domestic air passengers to 51.6 million in 2010 from 11.7 million in 2003. The Airport Authority of India (AAI) estimates that India will become the third-largest aviation market in the world after the U.S. and China, rising from its current ranking as ninth.

According to the AAI, India will have 150 airports and a fleet of 2,000 aircraft by 2030. The country’s fleet now stands a 735 aircraft owned and leased by public and private aviation companies.

And, with the International Air Transport Association also forecasting that the Indian civil aviation market will record a compound annual growth rate of more than 16% in 2010-13, it is clear that the once booming industry is not crash-landing.

Lenders have no plans for a second restructuring of loans to India's struggling Kingfisher Airlines, India's junior minister of finance said on Friday, in a move that indicates relief may not be easy for the debt-laden firm.

In March this year, India's third largest airline had issued shares to a consortium of 13 banks led by State Bank of India and allotted shares to its founders in a restructuring process that helped pare debt.

"State Bank of India, leader of the consortium, has stated that at present there is no such plan," federal minister of state, finance, Namo Narain Meena said in Parliament, in answer to a query whether banks are planning to carry out a second restructuring of loans.

Government documents show that 19 banks have an exposure of INR64.19 billion rupees to the airline. SBI, India's largest lender, has the maximum exposure of INR14.57 billion rupees as of end November.

SBI has exceeded its exposure limit of INR14.36 billion rupees, the documents show.

"The repayment to SBI in respect of advances by Kingfisher Airlines will commence from September 2012. Servicing of interest is being done with some delay," Narain Meena said in a written reply to Parliament.

Kingfisher, owned by flamboyant drinks tycoon Vijay Mallya, is desperately scouting for funds from potential investors and more cushion from its banks to stay afloat.

"Debt is not an option at all for Kingfisher. At the end of the day, debt and interest payments have overburdened the airline," said Kapil Kaul, chief executive for the Indian subcontinent and Middle East at the Centre for Asia Pacific Aviation (CAPA), an aviation consulting firm.

"What Kingfisher needs is an equity infusion of USD$200 million - USD$250 million urgently. Without bringing in equity there is no game."

The airline, which has been late in paying salaries, hit national headlines when it cancelled hundreds of flights in November in a move to cut costs and exit loss-making routes.

However, its problems multiplied with Mumbai airport putting it on a cash-and-carry basis and service tax officials freezing 11 of its bank accounts for non-payment of dues.

"We are considering taking legal action against Kingfisher for not paying service tax," S K Goel, chairman of India's central board of excise and customs said on Friday.

A Kingfisher Airlines spokesman declined to comment.

Most Indian carriers, including state-run Air India, are troubled by rising fuel costs and price wars emanating from intense competition.

India's airlines are on course to post record losses of more than USD$2.5 billion for the year ending March 2012, and investors have become wary of an industry that, just a few years back, ordered hundreds of aircraft in an ambitious bet on the future.

ASSETS AS COLLATERAL

Kingfisher Airlines has pledged its brand as collateral with its lender consortium for INR41 billion rupees, government documents showed. The brand valuation was done by Grant Thornton in 2010.

Kingfisher is one of India's most successful brands, ranked 116 by Campaign magazine in its top 1,000 Asia brands list for 2011, with only one Indian brand - Amul - higher.

Over and above the brand hypothecation, Kingfisher has also pledged collateral security worth about INR11.3 billion rupees, including properties in Mumbai and Goa, helicopters and ground support and office equipment.

Chairman Mallya has given personal guarantees of INR2.48 billion rupees to the banks while the airline's parent United Breweries Holdings has given corporate guarantees worth INR16 billion rupees.

Kingfisher, which has a negative net worth, aims to cut its current debt by 42 percent to INR37.2 billion rupees through the sale and lease-back of aircraft, sale of a property in Mumbai and conversion of rupee loans into lower interest foreign loans.

The airline is targeting an interest cost reduction of INR3.94 billion rupees per annum.

(Reuters)