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Kingfisher lost Rs 1,150 cr in the
quarter to end-March, vs a loss of Rs 360 cr a year ago
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Kingfisher Airlines' fourth-quarter net loss more than trebled as huge cuts in the number of flights compounded the woes of a cash-strapped carrier facing high fuel prices and intense competition for low fares.
The high-profile airline, which is owned by flamboyant liquor baron Vijay Mallya, lost Rs 1,150 crore in the quarter to end-March, compared with a loss of Rs 360 crore a year earlier.
Kingfisher, which was India's No. 2
airline until a year ago, has been the biggest victim of turbulence in India's
aviation industry, where six main carriers face a total debt load of $20
billion and $2 billion in annual losses.
It is now the smallest carrier in
India by market share. Shares in the airline have plummeted more than 80% since
the beginning of 2011, shrinking the airline's market value to just under $100
million.
Kingfisher shares slumped as much as
6.3% in early trading on Thursday to a record low of Rs 10.35.
The carrier blamed losses on high
fuel prices, a weak rupee and an "unprecedented, tough operating
environment," but said it would return to normal services within 12
months.
"The company has a focused
fleet re-induction plan and hopes to be back to full-scale operations in the
next 12 months backed by a recapitalization plan that the company is actively
pursuing and confident of achieving," it said in a statement on Thursday.
National carrier Air India has been
forced to cut most of its international routes due to industrial action by its
pilots, handing Jet Airways an opportunity to increase aggressively its market
share in international routes.
Low-fare and mostly domestic
carriers such as IndiGo - the only airline making money in India - and SpiceJet
have also gained market share recently as Kingfisher and Air India have
suffered.
SpiceJet said on Wednesday that its
net loss for the January-March quarter had widened more than four-fold, but it
expected lower costs once the company starts importing jet fuel directly.
Fund constraints
Kingfisher needs at least $500
million immediately to keep flying, according to the Centre for Asia Pacific
Aviation, but there has been no sign of funding in the near term.
The company said its net loss for
the year to end-March was Rs 2,330 crore, more than double its loss in the
previous fiscal year.
India's plans to allow foreign
airlines to invest up to 49% in local carriers - for which Kingfisher has
lobbied hard - has not yet taken off, adding to its funding crisis.
Mallya has repeatedly insisted that
several domestic and international investors are interested in his company, and
for months the names of many foreign airlines and local tycoons have been
reported as prospective White Knights, but so far there has been much talk and
no money.
If Kingfisher fails to turn the
airline around, its banks - which have $1.3 billion in loans outstanding -
would be left to pick over the carcass in a country that does not have a formal
bankruptcy process.
Loans are secured in part by a
combination of guarantees by the airline's parent, the UB group, as well as
Kingfisher shares, Mallya's personal guarantees, its Mumbai real estate assets
and the Kingfisher brand itself, bankers said.
European planemaker Airbus, which
has accommodated Kingfisher by pushing its aircraft deliveries back in the
queue, would lose outstanding orders for 92 planes with a combined list price
of $12 billion. It would also see Kingfisher's fleet enter the second-hand
market.
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