NEW
DELHI: Kingfisher
Airlines Ltd dropped nearly 4 percent in trade to a fresh low on Monday
after the airline faced a fresh setback on Saturday when its pilots -- who have
not received salaries for five months -- planned to drag the management to the
labour court.
The stock is now trading below its face value of Rs 10 as fresh worries resurfaced for the airliner after 80-odd pilots refused to fly on Saturday as the airline has not paid salaries for the last five months, and this led to the cancellation of over 40 of the 110 daily flights it operates.
"The debt-ridden airline has paid February salaries to around 75 percent of the staff, while the rest are yet to get their dues," PTI reported.
Kingfisher closed 3.78 percent lower at Rs 9.94. It has hit an intraday low of Rs 9.85 and a high of Rs 10.40.
"Following the promise of payment by Monday, the pilots resumed work and the airline is now back to operating its truncated schedule with the 10-12 aircraft it currently flies. But, the next round of trouble may not be far," TNN reported.
According to most analysts, it's a make-or-break situation for the carrier and it will be a turbulent ride for the company with the absence of any reforms.
"(The) King of Good times has now has lot of bad news up its sleeve. We strongly believe the airline sector in India is very difficult to operate in and without major reforms it will be a rough ride. However, FDI in aviation alone will not help the situation," AK Prabhakar, Senior Vice President - Equity Research at Anand Rathi, said.
"We maintain a 'sell/avoid' rating on the stock as it will be very difficult for the company to come out of this mess," Prabhakar added.
"The aviation ministry has, however, made it clear it will not pull the plug on Kingfisher, which has debts of over Rs 7,000 crore with banks - mostly public sector banks - and its total liabilities-cum-losses are over Rs 10,000 crore," the report added.
"Technically, the daily as well as weekly charts look weak for KFA, and with the stock breaking the previous support levels of Rs 10-10.50, it has indicated the weakness would persist going forward," Kunal Bothra, Senior Technical Analyst - Manager Advisory at LKP Securities Ltd, said.
"The 200 DMA is at Rs 20 levels, which gives an indication that the stock could still face selling pressure," Bothra added.
The stock is now trading below its face value of Rs 10 as fresh worries resurfaced for the airliner after 80-odd pilots refused to fly on Saturday as the airline has not paid salaries for the last five months, and this led to the cancellation of over 40 of the 110 daily flights it operates.
"The debt-ridden airline has paid February salaries to around 75 percent of the staff, while the rest are yet to get their dues," PTI reported.
Kingfisher closed 3.78 percent lower at Rs 9.94. It has hit an intraday low of Rs 9.85 and a high of Rs 10.40.
"Following the promise of payment by Monday, the pilots resumed work and the airline is now back to operating its truncated schedule with the 10-12 aircraft it currently flies. But, the next round of trouble may not be far," TNN reported.
According to most analysts, it's a make-or-break situation for the carrier and it will be a turbulent ride for the company with the absence of any reforms.
"(The) King of Good times has now has lot of bad news up its sleeve. We strongly believe the airline sector in India is very difficult to operate in and without major reforms it will be a rough ride. However, FDI in aviation alone will not help the situation," AK Prabhakar, Senior Vice President - Equity Research at Anand Rathi, said.
"We maintain a 'sell/avoid' rating on the stock as it will be very difficult for the company to come out of this mess," Prabhakar added.
"The aviation ministry has, however, made it clear it will not pull the plug on Kingfisher, which has debts of over Rs 7,000 crore with banks - mostly public sector banks - and its total liabilities-cum-losses are over Rs 10,000 crore," the report added.
"Technically, the daily as well as weekly charts look weak for KFA, and with the stock breaking the previous support levels of Rs 10-10.50, it has indicated the weakness would persist going forward," Kunal Bothra, Senior Technical Analyst - Manager Advisory at LKP Securities Ltd, said.
"The 200 DMA is at Rs 20 levels, which gives an indication that the stock could still face selling pressure," Bothra added.
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