Mumbai, April 10 (PTI): Vijay Mallya's Kingfisher Airlines has decided to outsource all its major requirements, including ground handling and engineering maintenance facilities, from Indian Airlines (IA).

IA will also operate, at a later stage, flights for Kingfisher to the Northeast and other sectors under category II and III according to the guidelines laid down by the director-general of civil aviation (DGCA) for which the start-up airline would pay a compensation to the domestic carrier, a senior IA official said.

IA is likely to be paid over Rs 100 crore per annum and memorandum of understanding (MoU) for a two-year period is expected to be signed shortly, the official said.