July 02, 2012
India’s cash-strapped Kingfisher Airlines is reducing flight operations as it starts returning aircraft to lessors.
“The private airline is currently operating around 100 flights daily with about 20 aircraft. And a few aircraft are grounded as they are undergoing routine maintenance that requires replacement of spare parts, which the airline is unable to fund due to the severe financial crunch,” a civil aviation ministry official tells Aviation Week.
“The flash strike by pilots since July 1 also has compounded the airline’s woes,” the official adds.
According to the ministry, Kingfisher in recent months has returned about 34 aircraft to lessors as the lease term expired. “This mainly has shrunk the fleet size of Kingfisher as it couldn’t get the required funds to renew the lease agreement,” the official says.
Reports, however, suggested that the private airline defaulted on lease rentals of more than 10 billion rupees, and as a result the lessors had taken possession of the aircraft.
Kingfisher officials were unavailable to comment on this, despite repeated requests.
About 90% of Kingfisher’s fleet of Airbus A320, A330 and ATR aircraft are leased.
Meanwhile, lenders to India’s beleaguered airlines, led by State Bank of India, are planning to meet this week to review the airline’s financial position and finalize a loan restructuring program.
Kingfisher also is likely to announce a plan for new equity, industry sources say, although they add that the bank consortium will not invest more working capital into the airline.