Planning fuel imports to cut costs: Mallya

Mumbai -  Cash-strapped Kingfisher Airlines chairman Vijay Mallya Tuesday said they were planning to directly import jet fuel to cut costs.

"We have applied officially to the ministry of commerce for direct import of fuel, and if we import fuel directly for our own use we become an actual user, and therefore, we don't pay sales tax," Mallya said addressing a press conference here.

Mallya said the fuel costs account for over 50 percent of the operating cost, which gets increased due to the sales tax charged by various state governments.

Mallya further said the airline has managed to reduce its dues to the three state-run Oil Marketing Companies (OMCs).

"We have fully repaid IOC (Indian Oil Corporation) and BPCL (Bharat Petroleum Corporation Limited). As far as HPCL (Hindustan Petroleum Corporation Ltd) is concerned, from over Rs.600 crore of unsecured credit... we have given bank guarantees and our outstanding to them is now down to Rs.40 crores."

The airline has curtailed 40 flights every day since Nov 9 -- a move, the company said, was taken to rationalise route plans and improve yields.

The airline has not posted any profit since its launch five years ago, and reported a net loss of Rs.1,027 crore in the last fiscal and Rs.263 crore in the last quarter.