MUMBAI: The UB Group
has shifted the ownership of a customised corporate jet used by promoter Vijay Mallya
from the bankrupt Kingfisher
Airlines to a group holding firm.
The
aircraft - an Airbus
A319 - till recently operated by Kingfisher Airlines in the passenger aircraft
category, was tweaked to suit Mallya's needs, according to information
available with Directorate General of Civil Aviation (DGCA).
The DGCA records also show that the aircraft used by the king of good times was modified from a 144-seat capacity to a more spacious 22-seater, and bears the registration number of VT VJM with CJ Leasing Company as its owner. Before the aircraft was transferred to the UB Group, Kingfisher Airlines picked up its maintenance and operating cost tabs. In response to ET's query, the airline said: "Corporate aircraft costs have always been shared by group firms since 1990," but refused to elaborate further.
A source close to the development said the change in ownership of the airline happened less than two months ago, but DGCA is yet to acknowledge the change in its record.
The Airbus A319, that tycoons like Mallya would love to own, is considered an efficient corporate jet. It is compatible with A320s and can be flown by pilots who are trained to fly A320s, which is the staple airline for the Kingfisher fleet. Typically, it costs about $80 million (Rs 432 crore), according to the current price list provided by Airbus.
The cost of maintaining an A319 is about 7 crore annually. With the crew, however, the money needed to keep this plane flying is about 10 crore, inclusive of fuel costs and airport charges in navigation and parking, etc, according to industry sources.
The DGCA records also show that the aircraft used by the king of good times was modified from a 144-seat capacity to a more spacious 22-seater, and bears the registration number of VT VJM with CJ Leasing Company as its owner. Before the aircraft was transferred to the UB Group, Kingfisher Airlines picked up its maintenance and operating cost tabs. In response to ET's query, the airline said: "Corporate aircraft costs have always been shared by group firms since 1990," but refused to elaborate further.
A source close to the development said the change in ownership of the airline happened less than two months ago, but DGCA is yet to acknowledge the change in its record.
The Airbus A319, that tycoons like Mallya would love to own, is considered an efficient corporate jet. It is compatible with A320s and can be flown by pilots who are trained to fly A320s, which is the staple airline for the Kingfisher fleet. Typically, it costs about $80 million (Rs 432 crore), according to the current price list provided by Airbus.
The cost of maintaining an A319 is about 7 crore annually. With the crew, however, the money needed to keep this plane flying is about 10 crore, inclusive of fuel costs and airport charges in navigation and parking, etc, according to industry sources.
|
|
Curiously,
Kingfisher Airlines' move to transfer ownership of the corporate jet to UB
Group comes at a time when lenders and other stakeholders are worried about the
airline's fast-deteriorating financial health.
With attempts to rope in a strategic investor or attract equity into the airline not having worked so far, lenders are assessing the possibility of liquidation of assets of the airline
In a recent lenders' meet in Mumbai, 17 bankers of Kingfisher conveyed to the airline management represented by CEO Sanjay Aggarwal and UB Group CFO Ravi Nedungadi that they would like to see a concrete plan to settle dues. The banks would also want the airline to pay fees on the guarantees and letter of credit that is soon due for renewal. The airline has a debt of over Rs 7,500 crore and accumulated losses of over Rs 4,000 crore.
It's not clear whether the A319, meant for exclusive use by Mallya, was hypothecated to banks. Banking sources told ET that the aircraft valued at about Rs 107 crore as security and helicopters valued around Rs 90 crore are with banks as guarantee.
The lenders had appointed HDFC to value the non-core asset base of Kingfisher Airlines. The airline management has, in turn, requested banks to liquidate some realty assets, including the Kingfisher House in Mumbai, which was the airline's corporate headquarters for a while.
With attempts to rope in a strategic investor or attract equity into the airline not having worked so far, lenders are assessing the possibility of liquidation of assets of the airline
In a recent lenders' meet in Mumbai, 17 bankers of Kingfisher conveyed to the airline management represented by CEO Sanjay Aggarwal and UB Group CFO Ravi Nedungadi that they would like to see a concrete plan to settle dues. The banks would also want the airline to pay fees on the guarantees and letter of credit that is soon due for renewal. The airline has a debt of over Rs 7,500 crore and accumulated losses of over Rs 4,000 crore.
It's not clear whether the A319, meant for exclusive use by Mallya, was hypothecated to banks. Banking sources told ET that the aircraft valued at about Rs 107 crore as security and helicopters valued around Rs 90 crore are with banks as guarantee.
The lenders had appointed HDFC to value the non-core asset base of Kingfisher Airlines. The airline management has, in turn, requested banks to liquidate some realty assets, including the Kingfisher House in Mumbai, which was the airline's corporate headquarters for a while.
Meanwhile, the
airline is continuing its cash-strapped operations with just 12 aircraft and as
many as 40 to 50 aircraft are grounded across airports in the country. KFA's
pilots are continuing operations without being paid salary for over five months
now.
A financially-stretched Kingfisher would be happy to do away with this additional burden as recently institutional shareholders of the Delhi-based Avantha Group promoted by Gautam Thapar forced the transfer of a rs 270-crore aircraft purchase from the listed Crompton Greaves to an unlisted group entity.
A Section of kingfisher Pilots Go on Strike
In a separate development, a section of Kingfisher pilots went on strike in Delhi disrupting the schedule of the airline which caused cancellation of some flights. The chief executive officer of the airline, Sanjay Aggarwal, met the pilots in Delhi and assured employees that things will be sorted out once foreign airlines are allowed to invest in Indian carriers.
Aggarwal also wrote a letter to the employees promising that salaries of all employees will be credited by Friday.
The ground staff will be given their dues followed by pilots and executives by Friday. The staff has been periodically promised payment of salaries, but it has been delayed by five months now. The last salary that Kingfisher employees got was January's, which was paid in May.
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/ub-group-shifts-ownership-of-vijay-mallyas-corporate-jet-to-holding-company/articleshow/14814701.cms?curpg=2A financially-stretched Kingfisher would be happy to do away with this additional burden as recently institutional shareholders of the Delhi-based Avantha Group promoted by Gautam Thapar forced the transfer of a rs 270-crore aircraft purchase from the listed Crompton Greaves to an unlisted group entity.
A Section of kingfisher Pilots Go on Strike
In a separate development, a section of Kingfisher pilots went on strike in Delhi disrupting the schedule of the airline which caused cancellation of some flights. The chief executive officer of the airline, Sanjay Aggarwal, met the pilots in Delhi and assured employees that things will be sorted out once foreign airlines are allowed to invest in Indian carriers.
Aggarwal also wrote a letter to the employees promising that salaries of all employees will be credited by Friday.
The ground staff will be given their dues followed by pilots and executives by Friday. The staff has been periodically promised payment of salaries, but it has been delayed by five months now. The last salary that Kingfisher employees got was January's, which was paid in May.
