Mallya's low-cost airline set to take off

The Kingfisher is all set to fly. Liquor baron Vijay Mallya's Kingfisher Airlines will commence operations during the first quarter of 2005.

The company will be investing $750 million to acquire 12 new A-320 aircraft from Airbus, which will be delivered by October 2005. For the time being, Kingfisher Airlines is taking on lease four A-320s from GE Capital Aviation Services for Rs 100 crore (Rs 1 billion).

Kingfisher Airlines is currently a wholly owned subsidiary of UB Holdings. Addressing the media today in Mumbai, UB group Chairman Vijay Mallya said, "Many foreign investors have shown interest in picking up a stake in the company."

However, he refused to divulge the quantum of stake that the company would dilute or the names of the foreign investors. Mallya also added that he did not rule out an IPO of Kingfisher Airlines.

All the aircraft in the Kingfisher fleet will seat 180 passengers and it will be a single-class airline. On the group's foray into aviation Mallya said, "The UB group was the first to launch a non-government commercial air service in 1990. We now feel a compelling need to re-enter the aviation sector."

The group will be shortly expanding the board of Kingfisher Airlines. It has inducted airline veterans Parvez Damania as executive director and Vinay Kashyap as adviser.

The airline will fly on all trunk routes like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Indore, Guwahati, Dibrugarh, Kozhikode, Thiruvananthapuram, Mangalore and Goa.

"We are also looking at catering to international destinations. However, we would not like to restrict ourselves to Asean and Saarc countries. The government should allow a level playing field," Mallya said.