Manila Bulletin
August 14, 2012
India's Kingfisher Airlines Ltd., struggling with a cash shortage, reported a wider first-quarter loss as passengers shunned the carrier because of flight cuts and service disruptions.
The net loss in the three months ended June 30 totaled 6.5 billion rupees ($117 million), compared with a loss of 2.6 billion rupees a year earlier, the Bangalore-based carrier said in an e-mailed statement today. Sales fell 84 percent to 3 billion rupees.
The airline's market share has slumped to sixth from second as it grounded planes and struggled to pay salaries and interest on debt accumulated to pay for planes. Jet Airways (India) Ltd., and SpiceJet Ltd., the nation's two other listed carriers, returned to profit in the quarter as they benefited from Kingfisher's capacity cuts.
"There's no hope for Kingfisher," said Jasdeep Walia, an analyst at Kotak Securities Ltd. in Mumbai. "Interest costs it was servicing with about 65 planes now have to be paid with cash from operating a quarter of that fleet. It'll only lose more."
Constrolled by billionaire Vijay Mallya, thee carrier is operating 20 planes as it reduced services to about 120 flights a day, compared with 66 aircraft and about 340 daily flights in March 2011. It had a market share of 4.2 percent in June, compared with 27.4 percent for Jet and 26 percent at discount carrier IndiGo.
The company spent 3.8 billion rupees on returning or idling aircraft after cutting flights, according to the statement. Negotiations are on with lessors to seek more time to pay rentals on some aircraft, it said.
Kingfisher, following a directive from its lenders, withheld 280 million rupees in fees to entities that arranged loan guarantees, according to the statement.
The carrier has ended international operations and delayed Airbus SAS A380 deliveries beyond 2016 because of the losses. It was also shut out from International Air Transport Association's billing systems after failing to pay required cash deposits.
Kingfisher is in talks with IATA for regaining access, Tony Tyler, director general of the group, said July 25.
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