Kingfisher seeks $236 million damages from engine-maker IAE

NEW DELHI Mon Sep 2, 2013 9:23pm IST

Customers stand at a Kingfisher Airlines reservation office at the domestic airport in Mumbai March 20, 2012. REUTERS/Vivek Prakash/Files

Customers stand at a Kingfisher Airlines reservation office at the domestic airport in Mumbai March 20, 2012.

Credit: Reuters/Vivek Prakash/Files

Stocks

   

NEW DELHI (Reuters) - A founder group company of grounded Indian carrier Kingfisher Airlines Ltd(KING.NS) is seeking about $236 million in damages from engine-maker International Aero Engines for allegedly supplying "inherently defective" engines, the airline said.

United Breweries (Holdings) Ltd (UBHL.NS) has filed a lawsuit against International Aero Engines AG and its shareholders in a court in the southern Indian city of Bangalore, Kingfisher said in its annual report, which was made publicly available on Monday.

IAE, part-owned by United Technologies Corp's (UTX.N) Pratt & Whitney unit, competes with CFM International - a joint-venture of General Electric (GE.N) and France's Safran (SAF.PA) - to supply engines for Airbus EAD.PA A320 jetliners.

"IAE cannot comment on pending litigation," said Heather Waldron, communications manager for the U.S.-based engine firm.

The lawsuit alleges that the IAE V2500-A5 engines supplied to Kingfisher were "inherently defective, both in design and manufacture", Kingfisher said.

Kingfisher, controlled by liquor baron Vijay Mallya, has not flown since last October because of a funding crunch. Its flying licences expired at the end of last year and the company has so far had little success in a bid to revive operations.

Kingfisher, which had never reported a profit during its eight years of operations, is in talks with one potential investor in the airline as of August 14, it said in the annual report, without naming any company.

A difficult operating environment as well as the engine problems "severely affected" its operations and finances during the year to March 2013, Kingfisher said.

The carrier had grounded 14 Airbus EAD.PA A320 family aircraft that used the V2500 engines during the year to March 2011 due to technical problems relating to the engines, it had said in its annual report for that year.

A Kingfisher spokesman did not comment beyond the annual report. (Reporting by Devidutta Tripathy; Editing by Jane Merriman and Pravin Char)

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Pharma Deal

Pharma Deal

Sun Pharmaceutical wins U.S. approval to buy Ranbaxy  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage