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The plan might be approved with the official financial backing of UB Group, but attracting customers turned off by bad memories will be difficult in India’s increasingly competitive market.

Grounded Kingfisher Airlines submitted a plan to India’s aviation regulator to restart operations, saying its parent group would provide initial funding and asking for its flying license to be renewed.

Kingfisher, controlled by liquor tycoon Vijay Mallya, who also owns UB Group, was forced to halt operations last October and owes about $2.5 billion to banks, airports and others, the Centre for Asia Pacific Aviation consultancy estimates.

Its flying licenses expired at the end of last year. The company has a two year window to get them back.

“We have given a complete plan,” Sanjay Aggarwal told reporters on Wednesday after a meeting the sector regulator.

“We have requested that our license be renewed,” he said, adding the carrier planned to restart operations with seven aircraft, including five Airbus planes, and gradually increase that to 20 within a few months of the restart.

Mallya’s UB Group will help with initial funding, Aggarwal said. The Group earlier outlined a 6.5 billion rupee ($119 million) funding plan for Kingfisher.

The aviation regulator rebuffed a previous revival plan by Kingfisher on the grounds that – given its difficulties in paying back its lenders and the salaries of its staff – it might not guarantee a reliable service.

A senior government official with direct knowledge of the matter said on Wednesday UB Group’s agreeing to pump money into the airline was a “positive thing” for Kingfisher.

“We will have to examine the whole proposal,” said the official, who declined to be named because the discussions between the regulator and Kingfisher were private.

The official said Kingfisher was yet to get a so-called “no objection certificate” from the Airports Authority of India and tax authorities, which are prerequisites for it to fly.

Kingfisher has offered to pay the wages of its employees until January, 2013, the government official said, adding the airline has already obtained “no objection” certificates for its plan from private airport operators, fuel companies, plane maintenance firms, lessors and component suppliers.

Reporting by Devidutta Tripathy. Editing by Matthias Williams and Helen Massy-Beresford.

Copyright (2013) Thomson Reuters. Click for restrictions.


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Photo credit: People are silhouetted as Kingfisher Airlines' aircrafts are seen parked at an airport in New Delhi October 1, 2012. Mansi Thapliyal / Reuters

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