In January, Mallya wrote a letter to staff outlining a plan to revive the airline . He promised to invest Rs 650 crore from the UB Group so that some Kingfisher planes could begin flying again in the summer. But market analysts are sceptical.
They do not think UB (Holdings) Limited, until recently the holding company of the airline, will be able to do much to bail out the carrier. The firm held a 24.5 per cent stake in the airline as on September 30, 2012. "The UB (Holdings) balance sheet is extremely stretched, so how the fund infusion into the airline will happen is unclear," says Nikhil Vora, Managing Director at IDFC Securities. "It is most likely to come from the unlisted entities in the UB Group."Estimates of how much Kingfisher needs to pump in immediately to fly again vary. Civil Aviation Minister Ajit Singh says the struggling carrier needs about Rs 1,000 crore to resume operations. Sharan Lillaney, analyst at Angel Broking Ltd, says the airline will require about Rs 2,000 crore to start with six to 10 aircraft. "It was grounded because of financial problems, not any safety issues… It has proved itself to be a good airline."