Kingfisher set to rule the Indian skies

Kingfisher Airlines is poising itself to become India's biggest and best airline, and plans to fly international routes by raising $200 million through its initial public offer (IPO) next year, its chairman said. Tycoon Vijay Mallya said his Airline was looking at launching the IPO during the second half of 2006. "We are not that enthusiastic about a massive dilution. It will depend on the price," he said on the sidelines of a regional aviation conference.

"Our plans are to also fly internationally and our vision is to be the biggest and best in the Indian skies by 2010," he said.

The airline, which is just six months old, plans to raise 200 million dollars in its IPO to help Finance its shopping bills for 65 new aircraft to help in its global expansion, Mallya, also Kingfisher's managing director, said.

Besides the IPO, Kingfisher, which is a unit of the UB group, may also seek loans from its parent UB group's bankers to raise the financing needed for the aircraft purchases.

He said his airline had a six per cent market share and was expected to break-even in the first year of operation 'if we are lucky, if not most certainly next year'.

Kingfisher has ordered 30 Airbus A320s worth 1.9 billion dollars, 20 ATR 72-500 Turboprop Aircraft amounting to 350 million dollars, five Airbus A380s, five A330s and five A350s.

Mallya said his airline had plans to launch non-stop flights from New Delhi, Mumbai and Bangalore to New York by 2010 when the first A380 jumbo is delivered. The airline is also looking at markets in China, Hong Kong, Singapore and Malaysia as well as the Middle East.

The airline is also bidding for the debt-ridden Air Sahara, which has international routes. Kingfisher has submitted its bid, which is reportedly below the 750 million dollars valuation by Air Sahara's advisors Ernst and Young.

Mallaya said the ball was now in Air Sahara's court. Jet Airways is also reportedly seeking to buy a stake in Air Sahara.

Mallya made it clear that the merger deal with Air Sahara was viable only if the Indian government did not withdraw Air Sahara's international routes, landing slots and other airport privileges. He also urged the Indian government to shorten the time for domestic carriers to enter the global foray to two years. Kingfisher aims to launch first-class seats in March next year but 'at business class price' to target India's 300 million middle-class population, he said.

Earlier at the conference, Kingfisher was named 'Best New Airline of the Year' by the Center for Asia Pacific Aviation. Meanwhile, Malaysian budget carrier Air Asia said it had no plans at the moment to explore the Indian aviation market. The airline also said that it had dropped plans to fly to Singapore. Air Asia chief executive Tony Fernandes said his airline did not submit any new applications after failing several times to secure landing rights in Singapore. He added that the booming Indian market did not feature on Air Asia's regional expansion programme at the moment as the country still had strict regulations on aviation. Fernandes, who is Malaysian of Indian origin, won the 'Aviation Executive of the Year Award' for a second straight year, conferred by the center for Asia pacific aviation during the conference.