Outsourcing: Kingfisher to pay IA Rs 120 crore annually

Vijay Mallya's Kingfisher Airlines will pay Indian Airlines Rs 120 crore annually for the out-sourcing deal it has signed with the state-run carrier.

Both the carriers have an agreement which requires Indian Airlines to undertake the ground handling, part of maintenance and flying of non-metro routes for Kingfisher Airlines.

"Our agreement with Indian Airlines is for two years minimum. It gives us an immense saving potential. Besides, the present policy allows pooling of flying requirements by carriers," said Mallya.

Kingfisher Airlines' agreement with Indian Airlines also allows the private carrier to use the terminals and infrastructure of the state-owned carriers in all the airports.

Mallya also said that the carrier hopes to break-even in the first year of operation itself. Kingfisher will start flying smaller routes in December once its fleet of Airbus A 319s come on board.

The airline's A 319 fleet based out of Bangalore will serve operations to cities like Pune, Hyderabad, Thiruvananthapuram, Kochi amongst others.