Kingfisher Airlines will curtail its overseas operations as the debt-crippled carrier looks to slash costs as its funding dries up and losses mount.
Kingfisher, which has cut its operations as pilots walk out and authorities freeze its bank accounts, said in a statement it is searching for urgent working capital. Foreign investors have shown an interest in the carrier, it said.
“We would like to confirm that we are curtailing our wide body overseas operations that are bleeding heavily,” the airline said on Wednesday, adding that it had already returned one Airbus A330-200 to its UK lessor as a result.
Kingfisher, which has never turned a profit, has become a byword for India’s struggling airline industry beset by high jet fuel costs, stiff competition and low fares.
The government is expected to soon allow foreign carriers to buy a stake in Indian airlines to help the industry mired in around $20 billion worth of debt.
“The government’s final verdict on removing the restriction on investment by a foreign airline within the existing FDI limit of 49 per cent is awaited. We can confirm that there is interest from prospectives on this basis,” Kingfisher said.
Kingfisher, controlled by flamboyant liquor baron Vijay Mallya, was suspended from the International Air Transport Association’s account settlement system last week due to non-payment of fees.
The airline said on Wednesday that the suspension was due to tax authorities’ freeze on its bank accounts.
“We continue to work with the tax authorities to arrive at a solution to de-freeze our accounts as early as possible… We are also working with our bankers to realise the urgent interim working capital,” Kingfisher said.