Despite losses, Kingfisher will survive: Mallya

New Delhi, Dec 24: Despite losses of Rs 347 crore in the first 18 months, Kingfisher Airlines has the power to survive, its chairman and CEO Vijay Mallya says.

''The airline was not a mistake,'' he said in an interview to CNN-IBN television channel. ''Kingfisher Airlines did lose money. It continues to lose money. However, we are losing a lot less than others. That's not comforting but the fact is there is a blood bath.

There will be a shakeout. We have the staying power and the sustenance that it takes.'' Dr Mallya claimed that Kingfisher's average ticket value is among the highest and that it is getting twice the yield of a low fare carrier.

''Kingfisher is a very well differentiated product and acknowledged (as such). Our average ticket value across our network is among the highest in the country. And it (the battle) is only between Jet Airways and Kingfisher. On a typical route, we are getting twice the yield of a low fare carrier.'' Several aviation experts are predicting that airline industry losses could double in the next two years and several airlines would go belly-up. But Dr Mallya insisted that will not happen to Kingfisher.

He went on to claim that Kingfisher had expressions of interest from a number of private equity houses but is in no hurry to clinch a deal. ''We aren't desperately looking for cash. Kingfisher will never go belly-up. We have a wonderful product which is now rated as the best in the Indian skies. The fact is we are not burning cash to the extent that others are.'' Dr Mallya predicted that Kingfisher will break even in the financial year 2008-09.

''We have a paid up capital of 100 million dollars which is Rs 450 crore. We will fund it and we have put in place funding arrangements quite adequately. And let me tell you, our funding arrangements for Kingfisher are not to cover operating losses. These are largely pre-delivery payments towards aircraft that we have on order.'' The fundamentals of civil aviation growth in India remain intact and very compelling, he said. However, there has been a huge increase in deployed capacity.

''And, of course, there is low fare madness. India doesn't offer the scope and potential to be a low cost economy when it comes to aviation. In fact, the costs are very high.'' Next year, Kingfisher will take possession of at least five wide-bodied Airbus aircraft. Dr Mallya confidently predicted that by then he would have received permission to start an airline from the United States to India which will ensure that the new wide-bodied planes are in service.

He was also confident that the Indian government will relax eligibility criteria, thus permitting Kingfisher to fly abroad from India.

UNI