Mumbai/Bangalore, April 24:
Shares of Kingfisher Airlines plunged to a record low of Rs 14 on the Bombay Stock Exchange on Tuesday.
All aviation stocks fell on reports of the Government deferring its
decision on allowing foreign airlines to invest in domestic carriers.
But the fall was steepest for Kingfisher Airlines. While Kingfisher
shares closed at Rs 16.05, down 5.03 per cent, SpiceJet lost 2.85 per
cent to Rs 29 and Jet Airways was down 1 per cent to close at Rs 341.65.
On April 2, Kingfisher had climbed from a previous low of Rs 14.95
on hopes of the FDI proposal getting clearance. However, reports now
indicate that the Government could even defer the decision to May-end.
Aviation analysts say that allowing FDI may not benefit the aviation
industry greatly. Debt-laden airlines like KFA will find it difficult
to take advantage of it, they say.
?Kingfisher Airlines is unlikely to capitalise on FDI in aviation
considering it has less than 7 per cent market share. SpiceJet may stand
to gain the most and, perhaps, IndiGo over a period of time,? said Mr
Nikhil Vora of IDFC. With the domestic aviation sector witnessing high
passenger yields, the key to reviving the ailing airline sector lies in
revising the cost structure, he added.
Kingfisher Airlines had reported a net loss of Rs 444.26 crore for
Q3 2011-12. The banking consortium, with exposure of over Rs 7,000 crore
in the cash-strapped airline, has refused to extend further loans till
the company brings in fresh equity.
With the account turning sub-standard for all banks, ?it becomes all
the more difficult for us to consider the airline's request for
additional funding?, said a State Bank of India official. ?The airline
has to come up with a feasible business plan and show seriousness in
turning its fortunes,? he added.
Another banker was hopeful that with the airline being allowed to
import fuel directly and the FDI coming into place soon, the airline
would be able to perform better. Kingfisher's continued operations,
despite on a skeletal level, would ensure some revenues for the company,
he said. ?The airline can't be shut down, and there is some hope in the
next two quarters,? he added.
No comments:
Post a Comment