Kingfisherair online Booking

Kingfisher pays 37 per cent higher premium; Air India defers renewal.The missing Air France aircraft has taken a toll on Indian carriers, whose finances are already under strain.

Private carrier Kingfisher Airlines has had to pay around 37 per cent higher premium to renew its annual cover. And the fear of a similar increase has forced Air India — the state-owned airline that has sought government bailout as it is finding it tough to pay salaries — to defer renewal by three months.

Unlike Vijay Mallya-promoted Kingfisher, Air India’s insurance cover has a clause that allows it to extend renewal by up to three months.

Kingfisher, which is holding talks to raise funds due to mounting debt and losses, has paid over Rs 50 crore ($10.5-11 million, since the payment was in foreign currency) to insure 74 aircraft, as against around Rs 38 crore ($7.9 million) that it paid last year. The airline purchased a $3.09 billion (around Rs 15,000 crore) insurance cover from ICICI Lombard which was effective from June 24, said insurance industry sources.

Indigo’s annual cover is scheduled to come up for renewal on July 31. While National Aviation Company, which flies under the Air India brand, did not respond to a questionnaire e-mailed on Saturday, Indigo could not be reached for comment.

In response to a questionnaire from Business Standard, a Kingfisher spokesperson said: “Our insurance costs are not comparable with last year as we have inducted five wide-body A 330 aircraft and commenced flying internationally, where liability insurance is very high.”

K Ramachandran, executive director, Boda Insurance Brokers, which is among the biggest reinsurance brokers in India, said that typically, premium rates were indifferent to addition of new aircraft or an airline’s move to fly outside its home market.

According to industry sources, Jet, which renewed its insurance cover at the start of the financial year, managed to do without paying a higher premium.

“The Air France crash is expected to provide a $600-$700 million hit (to global insurance companies), which is 40 per cent of the total premium collected, and therefore hardening of reinsurance rates was evident. We had seen prices go up from $2 billion to $4 billion after the 9/11 attacks (in the US),” said ICICI Lombard Reinsurance Head Rajiv Kumaraswamy.

Since January, there have been eight aviation-related claims, which have affected the market. Reinsurance rates are also hardening due to lower capacity in the market following financial problems at AIG and Swiss Re.

A leading insurance broker said, “The increase in the rates was partly due to hardening of the aviation market but largely due to mismanagement of fleet insurance in the reinsurance market.”

The state owned airline, National Aviation Company of India limited (Nacil), had extended its insurance cover for another three months. In June 2008, Air India had taken an insurance of $6.5 billion (over Rs 31,000 crore) from New India Assurance to cover its 140 aircraft.

Sources close to the development said that Air India called for a tender from insurance companies as the extended cover would lapse on September 30. New India, ICICI Lombard Bajaj Allianz, Reliance General Insurance and Iffco Tokio have submitted technical bids.

Following are the Travel websites which offers air ticket services

Following are the Travel websites which offers air ticket services

Yatra.com Domestic
goair
yaatra
travelosity
jetlite
airdeccan
railway reservation
paramount airways
Kingfisher airlines booking

Kingfisher Airlines may roll over Rs 800-crore debt

Fly Kingfisher Airlines may roll over Rs 800-crore debt

fly Kingfisher Airlines is looking to roll over close to Rs 800 crore of its short-term debt, even as it finalises the paperwork to borrow another Rs 1,500 crore from a few Indian public sector banks.

The airline, owned by Indian billionaire Vijay Mallya's liquor-to-airlines UB Group, is understood to be finalising the details of the rollover of debt that is due this fiscal.

According to data from Kingfisher Airlines, the company has short-term debt of around Rs 2,500 crore and a third of that is due for repayment this fiscal.

UB Group officials say they are confident of banks approving a rollover. “It is highly likely that we will get the nod for the rollover as banks are also eager not to categorise these loans as non-performing assets. UB Group also has had a long history of taking on debt and we have been effective in repayment. Besides, the airline industry is going through rough weather and financial institutions are recognising that we will be able to pay them back at the earliest,” a senior UB Group official said.

Kingfisher Airlines booking has a cumulative debt of close to Rs 6,000 crore and is leveraged around 13 times. It recently borrowed around Rs 500 crore from State Bank of India. The airline is also expected to take on an additional Rs 1,500 crore debt, which will raise the leverage to around 16.5 times. Industry sources estimated that Mallya had offered his personal guarantee to raise the additional Rs 2,000 crore of debt.

Company sources, however, indicated that this kind of heavy leverage was common in the aviation sector, with global airlines leveraging as much as 20 times. “It is not about leverage for now, it is about whether you have the wherewithal to ride out the trough and be ready for growth,” a senior official of UB Group added.

According to data from Kingfisher Airlines, corporate loans of around Rs 2,500 crore are mainly secured against cash flows from the airline operations and is backed by a corporate guarantee from UB Holdings, Mallya’s principal holding company, which controls around 67 per cent of Kingfisher Airlines.

Mallya has been lobbying the Indian government to allow foreign direct investment into the Indian civil aviation sector and is also understood to have initiated discussions with global airline majors.