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Monday, June 05, 2006

Kingfisher Air plans to raise $200m via IPO or FCCB route

Kingfisher Airlines will wait for the market to stabilise before firming up its plans to raise around USD 200 million either through an IPO or through the foreign currency convertible bonds, FCCB, route, reports The Hindu Business Line.

In another development, the airline is learnt to be in talks with four US-based airlines to use their air rights to start operations from the US to India. Sources close to the airline said that the talks were at a preliminary stage, as the first of the wide-bodied A340-500, which the airline has ordered, will joint the fleet in 2008.

"We have given ourselves one year to raise funds. Hopefully, the market will stabilise soon," the Kingfisher Airlines chairman, Vijay Mallya, told. The airline is planning to raise funds worth USD 200 million either through the FCCB route or through the private equity route. An initial public offering is another option the airline is looking at.

Buy orders

Early this year, the airline announced that it has placed orders for five ultra long haul A340-500s, which will joint the fleet in 2008. Another five aircraft are on option basis. Once Kingfisher Airlines gets these aircraft, it plans to get a US-based operator to fly them under the airline's brand from the US to India. Mallya has been critical of the current aviation policy, which does not allow Indian carriers to fly international routes until they complete five years of operations in the country.

Part of the USD 200-million, which will be raised, will be used to finance the purchase of more aircraft. The airline expects to have a total of 21 aircraft, including six ATRs in its fleet by the end of 2006.

"Easy to manoeuvre"

A pilot belonging to Kingfisher Airlines who test flew A380, the world's largest aircraft, said that the aircraft was extremely easy to manoeuvre.

"I really didn't feel that I was flying the world's biggest aircraft," said Capt Rajesh Malik, who has flown 1,500 hours on A320. He said the layout of the aircraft's cockpit was different from those of other aircraft. "There is a lot more back up in the cockpit compared with those of other aircraft," he said.

Kingfisher Airlines will get first of the five A380s it has ordered by 2010. The list price of the 555-seater aircraft is around USD 230 million.


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