BANGALORE: Low-cost carrier Kingfisher Red would shut down in four months with the airline group chief Vijay Mallya on Wednesday saying several measures have been initiated to face the financial problems caused by high interest burden and burgeoning fuel costs. “We are doing away with Kingfisher Red because we don’t intend to compete in the low-cost segment ... (But) all is not doom and gloom as people like to report,” Mallya told reporters after the Annual General Meeting (AGM) of the Kingfisher Airlines here. “We believe there are more than enough guests who prefer to travel the full-service Kingfisher Class and that shows through in our own performance where the load factors in Kingfisher Class are more than in Kingfisher Red,” he said. Mallya had bought over the erstwhile Air Deccan, the first Indian low-cost airline founded in 2003, and rebranded it Kingfisher Red in August 2008. Air Deccan then had a fleet of 21 aircraft, all in economy-class configuration. “Clearly the margins of Kingfisher Class are better than Kingfisher Red as the yields are better”, he said, adding that reconfiguration of aircraft have already started and should be completed over the next four months. A statement from the company later said Kingfisher is undertaking cabin reconfiguration, “which will add significant number of seats and, hence, generate additional revenue at minimal cost”. “All of Kingfisher’s Airbus aircraft will have first class with incremental seats in economy. At this time Kingfisher will be dropping the Kingfisher Red class of service. This effort will be concluded in the next four months,” he explained. Mallya said that at the AGM, the shareholders unanimously approved a Rs 2,000 crore rights issue.
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