Kingfisher, Jet Airways Drop International Routes
Oct 10, 2008
Neelam Mathews/New Delhi
Kingfisher Airlines is likely to stop its international operations following the deepening financial crisis that has hit the Indian airline industry, just as Jet Airways also announced "optimization" of its long-haul network.
Expat pilots and crew at Kingfisher that have been waiting since March for international operations to take place, are expected to be laid-off following this decision.
The fate of senior officials employed worldwide is also hanging in the balance, and AviationWeek has learned that the Director General of Civil Aviation (DGCA) has threatened to stop all operations of Kingfisher Airlines for not meeting the route dispersal guidelines of the government that obligates it to fly a certain amount of seats in under-served markets. Kingfisher has asked for a day's reprieve.
AviationWeek also was told on Friday that Chairman Vijay Mallya, who owns the Formula One Force India team, was rushing back from Japan to meet the government officials on Saturday.
Kingfisher, which took a more than $200 million loan from ICICI Bank toward operational expenses, has come under pressure with the current crisis leaving it with no option but to defer plans to raise funds from equity markets.
The carrier started its daily flights with an A330 from Bangalore to London Heathrow last month with dire load factors--an average of 35 passengers per flight. It was scheduled to start its Mumbai-London dailies Oct 26. The flights, yet to be loaded on the airline's Web site, are not expected to take place for the moment. The slots in London were said to have come from Air France/KLM.
Kingfisher had announced earlier with great fanfare its intention to fly its first international direct flights to San Francisco from Bangalore on the newly purchased A340-500, which never took off either. Two of its new A340-500s have been leased or possibly sold to Nigerian carriers. Three others are parked.
With excess capacity, the airline recently deferred orders for 29 A-320s and cut domestic capacity like the rest of its competitors by around 22%.
With more than 300 employees being laid off, there is more trouble brewing for the carrier whose chairman came under criticism recently for negotiating a shirt sponsorship deal for 20 million pounds with the U.K.s Queens Park Rangers to advertise his Kingfisher beer on the team shirts. The five-year agreement could also include the naming rights of a stadium to Kingfisher Stadium.
Kingfisher has no CEO as Mallya has decided to run the carrier himself.
Meanwhile Jet Airways today announced it would discontinue its Mumbai-Shanghai-San Francisco route on Jan. 13. Traffic from India to San Francisco will be funneled through Jet Airways' London gateway in cooperation with partners. The airline said the change is due mostly to a downturn in the U.S. and U.K. economies, and it will be "focusing more on its established international gateways and routes."
Kingfisher, Jet Airways Drop International Routes | AVIATION WEEK