Kingfisher Airlines to take off with spanking new fleet

Nobody can accuse Vijay Mallya of being unable to let his ambition and vision fly when it comes to the Kingfisher Airlines.

He has just returned from Toulouse after witnessing the unveiling of the world's largest commercial aircraft, A380, and an exercise currently on to decide the acquisition of wide-bodied aircraft will be completed in six months' time.

Placing an early order is important because, as Mallya himself said, the delivery position for new aircraft is getting tighter and Kingfisher Airline will reap the benefits of having already placed firm orders for 10 A320s.

These will start arriving in April, before the A320s of Air Deccan. By virtue of going in for only new aircraft, Kingfisher will be the airline with the youngest fleet in the world till mid-2007. The airline will start operations on May 7, when his son will be 18, and start flying from May 9.

New aircraft don't come cheap but "Kingfisher will be one of the most successful in the country" despite its fares being 20 per cent cheaper than the competition, except the no frills Air Deccan.

At this fare it will offer a near business class passenger experience in a single cabin configuration with individual video viewing and more spacious seating than competitors' economy classes.

Mallya is confident UB can sustain servicing the capital cost of new aircraft and meet the cash requirements of a new business.

He "may think of an IPO" but is confident of not losing control (he bristles at the suggestion) as Jet Airways, for example, is seeking to raise Rs 1,500 crore by giving up only 20 per cent stake.

The UB chief's optimism is based on expectations of buoyant demand. Air travel grew in India by 20 per cent in 2004 and is expected to grow by 20-25 per cent for the next few years.

That presumably should see a fifth player (there are already four established scheduled carriers, counting Indian Airlines and Alliance Air as one) through, global oil prices notwithstanding.

Mallya made a strong plea for removing the condition that private Indian airlines can ply foreign routes only after five years.

He pointed out that the Naresh Chandra Committee's report on the future of Indian commercial air travel has not stipulated this. What is more, it has pulled out all stops in arguing in favour of liberalisation.

While long haul international flights will require wide-bodied aircraft, the A320 with 77-tonne maximum takeoff weight that Kingfisher Airlines had ordered will enable it to serve ASEAN destinations like Singapore.

But wide-bodied aircraft are being evaluated both for long haul international flights at some future date and dense domestic trunk routes.