Kingfisher considers damp lease option to fly overseas

BANGALORE: Vijay Mallya’s plans to operate the one year-old Kingfisher Airlines on international routes could lead him to a ‘damp lease’ pact with a US carrier. This revenue sharing arrangement would see him banking on US airline to operate long-haul services to India under the Kingfisher brand, informed sources said.

Kingfisher International Airlines, incorporated in the US, may look at the option of leasing out wide-bodied aircrafts minus cabin crew to a US carrier, which will start operations to India. Mr Mallya is said to be opting for ‘damp lease’ as it facilitates the use of Kingfisher brand on international routes.

Further, Kingfisher International Airlines does not require Federal Aviation Administration (FAA) approval in this case. A fastrack FAA approval normally takes 12 months.

“We are talking to a few US carriers with licenses for international routes to lease our aircrafts, and let them operate under our brand,” a UB official told ET.

This is seen as a back-up in the event of government not allowing Kingfisher fly international routes by the time wide-bodied aircrafts arrive. Kingfisher is expected to start taking delivery of the wide-bodied Airbus A330 and A340 aircafts by ’07.

Currently, only domestic airlines with a five-year operational track record are allowed to fly overseas. Jet Airways and Air Sahara alone have the international rights among the private Indian airlines, and Kingfisher will have to wait till ’10 to mount overseas services.

“Kingfisher definitely has interest in long-haul services with the US as a key destination. Its aircraft purchase order reflects this.

However, having a US airline carry out operations under Kingfisher brand may not make strategic sense as Mr Mallya’s airline is a world-class product in domestic aviation,” said Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA) for India and Middle East.