Rising debt and idle aircraft have pushed Kingfisher Airlines
losses to INR7.55 billion ($141.8 million) in the October-December 2012
quarter. Losses were up 97% from INR4.44 billion in the year-ago period
when the airline still operated, albeit with a curtailed schedule.
Kingfisher, which suspended operations in October 2012, owes about $2.5 billion to debtors that include a consortium of banks, staff and airports.
No revenues were earned during the period, but aircraft lease rentals accounted for INR1.8 billion and other operating expenses for INR1.3 billion during the period. In a statement issued to the Indian stock exchanges, the airline’s auditors, BK Ramadhyani & Co., said the losses would have been much higher if the airline had used the “generally used accounting principles prevalent in India.” The loss would have gone up to INR11.1 billion if the airline had accounted for aircraft maintenance and repairs in accordance to the standards.
Kingfisher management said it has presented a revival plan to the Directorate General of Civil Aviation and is confident it will meet the requirements. At its peak, the airline operated 66 aircraft to 68 locations, including eight international destinations, and accounted for 20% of the Indian domestic market.
In a letter to employees Jan. 10, chairman Vijay Mallya said Kingfisher will begin flying by this summer with a capital infusion of INR6 billion. He has since been in negotiations with the regulator and lenders. A lot of hope has rested on a foreign airline or financial investor picking up stakes, since the Indian government liberalized its investment guidelines.
However, the market is not very confident of a revival. The airline’s stock has fallen 56% in the past year and management faces litigation from employees and airport operators. Its operating license expired in December, even though it can be revived in two years.
atwonline.com
Kingfisher, which suspended operations in October 2012, owes about $2.5 billion to debtors that include a consortium of banks, staff and airports.
No revenues were earned during the period, but aircraft lease rentals accounted for INR1.8 billion and other operating expenses for INR1.3 billion during the period. In a statement issued to the Indian stock exchanges, the airline’s auditors, BK Ramadhyani & Co., said the losses would have been much higher if the airline had used the “generally used accounting principles prevalent in India.” The loss would have gone up to INR11.1 billion if the airline had accounted for aircraft maintenance and repairs in accordance to the standards.
Kingfisher management said it has presented a revival plan to the Directorate General of Civil Aviation and is confident it will meet the requirements. At its peak, the airline operated 66 aircraft to 68 locations, including eight international destinations, and accounted for 20% of the Indian domestic market.
In a letter to employees Jan. 10, chairman Vijay Mallya said Kingfisher will begin flying by this summer with a capital infusion of INR6 billion. He has since been in negotiations with the regulator and lenders. A lot of hope has rested on a foreign airline or financial investor picking up stakes, since the Indian government liberalized its investment guidelines.
However, the market is not very confident of a revival. The airline’s stock has fallen 56% in the past year and management faces litigation from employees and airport operators. Its operating license expired in December, even though it can be revived in two years.
atwonline.com
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