Kingfisher submits limited restart plan; stock takes off

New Delhi, Dec. 24:  

Kingfisher Airlines has submitted to the Directorate-General of Civil Aviation an interim plan to restart operations. But it is unlikely that the airline will be able to take to the skies before its licence expires on December 31.

The airline’s limited restart plan was submitted to the DGCA by its CEO Sanjay Aggarwal here on Monday. The airline plans to start operations with five Airbus and two ATR aircraft and scale it up to 11 ATR and 10 Airbus fleet within 10 weeks.

Buoyed, the Kingfisher stock surged 4.9 per cent to close the day at Rs 15.95 on the NSE.

At the meeting, it was indicated that the airline will require about Rs 652 crore over the next 12 months for running its operations. These funds will come from the UB Group’s resources as banks are unwilling to fund the airline.

DGCA sources indicated that prima facie Kingfisher will have to submit more details to the regulator before any permission is given for restarting operations. “There is no date yet for the airline restarting operations. It will take the DGCA a few days to examine the airline’s interim plan. After the DGCA gives the go ahead, it will take 6-8 weeks for the airline to begin operations,” a source said.

Sources also indicated that the submission of the plan was an attempt to build investor confidence. It was indicated that out of the Rs 652 crore needed to restart operations, Rs 120 crore will be required to meet salary arrears of its employees. In addition, funds will be required for refurbishing aircraft, including working on their engines. The pilots will also have to undergo refresher session and medical check-up before they can start flying again.

At the meeting, Kingfisher officials claimed there were no dues to the oil companies barring an interest outstanding to Hindustan Petroleum.

The airline will still have to clear the dues to airports, including Mumbai airport, and the Airports Authority of India (AAI) to which it owes over Rs 250 crore.

The airline suspended operations on October 1 after its engineers refused to certify the airworthiness of aircraft till their pending wages were paid.

On October 20, the DGCA suspended Kingfisher’s licence as the airline was not in a position to run safe, sustainable and reliable operations.

http://www.thehindubusinessline.com/todays-paper/kingfisher-submits-limited-restart-plan-stock-takes-off/article4236244.ece