Quote: NEW DELHI: Liquor baron Vijay Mallya is out shopping again. And this time round, Mallya has set his sights on an US-based premium-class-only airline MAXjet Airways to fuel his dreams of taking Kingfisher Airlines international.
Mallya is in advanced talks with MAXjet for an outright acquisition - a deal that would give his Kingfisher Airlines rights to mount transatlantic flights and even operate between US and India, sources close to the development told ToI. The deal is expected to be concluded over few months.
Mallya, sources said, intends to also use the MAXjet acquisition to start direct flights between US and India under the bilateral Open Sky arranement between the two nations. "Negotiations are underway and they are at an advanced stage.
If the deal comes through, Kingfisher would be able to operate international flights using the MAXjet fleet from next year and augment the operations with its own long-haul jets that join its fleet from 2008,"the sources said.
Mallya confirmed the acquisition plan but refused to divulge details about his target airline. "We are talking with four US airlines for our international acquisition and MAXjet is one of them. The talks are still at a preliminary stage and nothing has been decided so far,"he said.
The acquisition, sources said, is aimed at cruising past the Indian regulation that restricts international flights only to airlines that have a five-year domestic flight track record. The purchase is expected to be carried out through his US-based venture - Kingfisher International Airlines (KIA) - in order to meet the law of the land.
US norms do not allow foreign ownership of airlines in America. Since Mallya's children - Sidhartha, Leana and Tanya - own a majority 75% stake in KIA as American citizens, this venture would meet the US regulation on ownership of airlines, sources said....
Aseem From India, joined Feb 2005, 2046 posts, RR: 10
Reply 2, posted (8 years 1 month 1 day 8 hours ago) and read 4209 times:
Quoting DIJKKIJK (Reply 1): Dont'know but a lot of my friends in India tell me that anything that apppears on the Times of India should be taken with a big spoon of salt...
no not quite!!
I don't think it would be a good idea to buy a US airlines. I dont' think it is that simple to seek permission of DoT to fly international. I sincerely hope he does not have to go through what Mittal had to in Euorpe.
Quoting Aseem (Reply 2): I sincerely hope he does not have to go through what Mittal had to in Euorpe.
The two are completely different situations. Of course, Mittal finally had to settle for a minority stake in the merged entity, which is ok as his operations are spread all over the world. I doubt mallya would want that, as he probably wants to use maxjets' rights to fly international from India to the US, bypassing the Indian government's regulations.
Never argue with idiots. They will bring you down to their level, and beat you with experience.
ANother From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 1 month 1 day 7 hours ago) and read 4087 times:
Quoting DIJKKIJK (Reply 1): US norms do not allow foreign ownership of airlines in America. Since Mallya's children - Sidhartha, Leana and Tanya - own a majority 75% stake in KIA as American citizens, this venture would meet the US regulation on ownership of airlines, sources said....
That is true, but the language is 'substantially owned, and effectively controlled' If Daddy runs the company, it isn't controlled by US citizens. They would have to craft their management structure very carefully.
TOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Reply 8, posted (8 years 1 month 1 day 6 hours ago) and read 4002 times:
This months Airline Business magazine noted that Kingfisher was looking to purchase a US carrier via his children. According to the article, a new airline in India cannot fly int'l for I believe 5 years after start up. Mallya wants a way around it, and MaxJet cetainly fits his business model. Some of you may not like the source, but it sounds plausible when combined with other sources.