Mallya says Airbus production delays will not affect Kingfisher

BY A CORRESPONDENT
June 24, 2006

UB Group Chairman Vijay Mallya has said that production delays on the Aurbus A380 super jumbo would not affect Kingfisher Airlines in the future as deliveries to the low-budget carrier are due in 2010. He said, "There will be delays in deliveries slated for the year 2007 and 2008. Our deliveries are due only in 2010. I do not believe our deliveries will be affected as Airbus would have solved their problems by then."

The airline had placed an order of 15 Airbus aircraft, including the new super-jumbo A320s, in an estimated $3.0 billion deal. EADS-owned Airbus had announced earlier this week that production delays with their Airbus 320 would delay aircraft delivery to several airlines by six to seven months.

Kingfisher's expansion plans will not be affected by this news, according to Mallya, who said, "We will add 10 more aircraft by December 2006, six in 2007 and then another eight in 2008. In addition, we will have 16 more ATR aircraft between 2007 and 2008." The deal with Airbus also includes purchase of 5 Airbus 350s and 5 long-haul Airbus 330s.

Reiterating that Kingfisher Airlines was not dependent on additional funding through an initial public offering (IPO), Chairman Vijay Mallya said that plans to come out with an IPO later this year would be shelved until "optimum value" for the shares can be found.

Mallya said, "That (IPO) is not a necessity or an imperative for us because we are well-funded. Kingfisher Airlines probably has the highest paid-up equity capital of any airline in India - Rs 372 crore to be precise," and added, "If the (stock) markets improve, and if we get full value - please understand that the determining factor (to go in for an IPO) is not the markets. Its the shareholder value and the value of Kingfisher Airlines itself."

"Unless we find optimum value, we are not going to dilute. Its a 100 per cent company of UB holdings and it will stay that way till full value is realised for the benefit of shareholders of UB holdings," he clarified.