Vijay Mallya: I have an investor who is interested in Kingfisher Airlines

His airline is facing one of its worst ever crisis. But Vijay Mallya , the promoter of Kingfisher Airlines, tells ET that many of its problems are due to external factors, and not because the airline has malfunctioned operationally and mismanaged its product. Edited excerpts:

 

Q; How much has Kingfisher sought form banks in working capital loans and term loans?

A: Our request to the banks has been made on the basis of appraisals made, so they will discuss it and we will engage with them. Working capital needs that we have made (Rs 700-800 crore as working capital loans and term loans) is defendable.

Q: Are you confident that the banks will agree, considering that the environment for the industry is not favorable?

A: Working capital is working capital, so at the end of the day banks are not there to damage business. Banks are there to support businesses that have justifiable needs. Banks have given loans to us and the banks are our shareholders. The banks are important and valuable stakeholders.

I am not taking any banks for granted, I won't dare to, but we have placed our requests and we are in a dialogue. I can't necessarily sit here and predict.

Q: It is being said that the Tatas made an offer of Rs 30 a share to buy stake in the airline. Please comment.

A: I have an investor who is interested but it all depends on how the regulatory framework takes shape and what the situation is like. I am not going to say anything more on the issue.

Q: Do you think the government will allow foreign airlines to buy stake in Indian carriers?

A: I have been an advocate of FDI, but the government also knows its business well, so it is up to the government. Though, I would very dearly like the policy to change, as it will be of great benefit to the sector as well.

Q: Why was the matter of flight cancellations and reconfiguration of aircraft handled shabbily?

A: Please give me some credit, as we have maintained connectivity on the sectors where we have been the only carrier. Although we suffered loss, we continued with the flights, as we wanted air connectivity in those parts of the country. At the end of day, we did cut some loss-making flights and took out some aircraft for reconfiguration because it gives us additional capacity and revenue. The way we cancelled the flights, may be we went wrong there, and we apologized for that. We took care of the guests and we refunded the money and we have done whatever we could.

Q: By when will you be able to steer Kingfisher out of financial trouble?

A: Every airline in India is in trouble and any airline that tells you it is doing fine and it is making money hand over fists, I would not believe it. And those making big profits are from sale and lease back of aircraft. It is not profit that is made from running an airline.

Q: How do you react to Jet looking at leveraging Kingfisher's crisis to its advantage and to increase its share of corporate travel?

A: Every airline has to do what they have to do. I have not heard them say this and they have said whatever they have said. I can also make statements about others, but it is not in my nature to make such Q&A statements. But I know that Kingfisher has its loyalists, over two million members of our KingClub, and if any airline thinks that it is just going to take them and go away, I don't think it is going to be that easy.

Q: Will your strategic investor be from oneworld Alliance or an investor from the Middle-East?

A: I can't talk about it because at the end of the day these foreigners say come to us only when the government permits it (strategic investment). There are many possibilities; let the policy framework permit it first.

(ET)