Kingfisher Airlines is in talks with private equity groups over securing a $400 million (£238.4 million) investment for the cash-strapped Indian carrier, the head of the business said today.

Vijay Mallya, the Bangalore-based aviation-to-liquor tycoon who also owns the Kingfisher beer brand, is under immense pressure to raise funds for his airline, which has struggled to pay its fuel bills and the contractors it relies on to maintain its planes in recent months.

Most of his rivals are in similarly pressed circumstances: India’s domestic aviation industry has recorded collective losses of about $2 billion in the past year amid a glut of overcapacity.

Mr Mallya said today that he hoped to raise part of the cash he needs from a private equity investor. "The current discussions are about... for $400 million," he told reporters on the sidelines of a World Economic Forum event in Delhi.

Early last year he made similar comments and Kingfisher Airlines was linked to TPG Partners, but no deal was struck.

Since then, India's domestic airlines have only endured more turbulence. Kingfisher, which was India’s largest private sector domestic carrier by market share last month, made a loss of about £56 million in its second quarter, a 13 per cent improvement on the same period a year earlier.

The numbers followed a round of fierce cost cuts. Revenues at the company fell 13 per cent to about £152 million.

The gloomy numbers echoed the mood across an industry sent reeling by a slump in demand after years of over-ambitious expansion.

In September, Naresh Goyal, the chairman of Jet Airways, Kingfisher’s biggest rival, accused his pilots of "behaving like terrorists" after hundreds of them called in sick, causing the cancellation of hundreds of flights, to protest against the sacking of four colleagues involved in union activities.

Jet, which has been struggling to sack workers, was thought to be loosing about £250,000 a day even before the disruption.

A month earlier, more than 20,000 employees of Air India, the state-owned airline which lost at least £625million last year and remains deep in the red, embarked on a three-day hunger strike to protest plans to cut their pay.

Also in August, the Federation of Indian Airlines (FIA), a trade body that includes the country’s largest private carriers, called off a proposed one-day strike that had threatened to freeze most of India’s air passenger network.

The FIA, which account for 80 per cent of domestic traffic, was demanding cuts to fuel taxes and airport charges. It backed down after coming under fierce political pressure from New Delhi.

Bankers in Mumbai said that Mr Mallya’s keenness to attract a foreign equity player or another strategic investors was well known, but that it was far from unclear that a deal would be easily struck.

"There may be a few contrarian players out there with deep pockets, but Indian airlines don’t look like a very attractive place to park money today," said one.

Kingfisher was unavailable for comment.

Bankers said that another plan by Mr Mallya to raise cash by bundling together his investments in sports clubs including the Force India F1 team and the Bangalore Royal Challengers, a cricket team that plays in the Indian Premier League, may be quicker to succeed.

Mr Mallya also recently announced a $100 million rights share issue and a $100 million global depository receipts issue for Kingfisher Airlines.

There was, however, one indication that that private equity firms are looking at opportunities in the subcontinent, with Blackstone investing as much as 3 billion rupees in Gateway Rail Freight, a logistics company that specialises in transporting shipping containers by rail and operates 17 trains across India.

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