India's Kingfisher returning some aircraft and retrenching staff

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Indian carrier Kingfisher Airlines is returning some of its leased aircraft and has started to retrench some workers in an effort to cut costs and stem its losses.

"Upon rationalising the route network of the airline and having closely examined aircraft utilisation, we have identified surplus aircraft which are now redundant and are therefore being returned back to lessors," a Kingfisher spokesman in Mumbai says in an emailed response to a query from flightglobal.com's sister premium news source ATI.

The company has also identified 300 employees who will be retrenched shortly but these will be voluntary redundancies, says the spokesman, adding that the retrenched workers will get two months pay for every year of service.

The airline is handing back some of its leased aircraft to "achieve cost savings and rationalisation and operational efficiencies", says the spokesman, adding that this has taken on greater urgency because of "the ongoing turbulence faced by the aviation industry".

 kingfisher-a330-445
 © AirTeamImages/Stephane Beiliard
A Kingfisher Airlines Airbus A330

The move to retrench 300 employees came after the airline embarked on a process of "integration of the two entities", says the spokesman, referring to Kingfisher's merger with Indian low-cost carrier Deccan.

"We examined the complete organisation structure of the airline and mapped the skill sets of the existing talent pool with the projected talent requirements of the company."

He adds: "Many employees were counselled on their career path progression and best utilisation of their individual skill sets."

Kingfisher is one of India's largest airlines and operates a fleet of ATR turboprops and Airbus A320-family aircraft.

It also recently started taking delivery of Airbus A330s on order and next month is due to receive all five of its Airbus A340s on order.

The airline has already reached an agreement with Airbus and ATR to delay or stagger the delivery of new aircraft on order and the airline is also actively looking to sell two or three of its A340s.

Kingfisher faces stiff competition in the Indian market at a time when the economy is slowing.

The airline's major owner, Vijay Mallya, has already said publicly Kingfisher will only break even in 2010. He had earlier forecast the airline would break-even in 2009.