Kingfisher Airlines Ltd posts Rs.822 crore loss as planes stay grounded
Mumbai – Losses at Vijay Mallya’s Kingfisher Airlines Ltd, which hasn’t flown since October 2012, widened to Rs.822.42 crore in the three months ended 31 December compared with a loss of Rs.755.17 crore in the year-ago period.
With planes remaining on the ground, the airline had no sales in the reporting quarter, mirroring the zero sales a year ago.
The Mumbai-based airline had accumulated losses of Rs.16,023.46 crore on 31 March and its net worth was a negative Rs.12,919.82 crore.
Kingfisher Airlines, launched in 2005, has never made a profit.
The finance costs of Kingfisher for the reporting quarter stood at Rs.350.99 crore against Rs.401.25 crore in the same quarter the previous year.
The redelivery cost of aircraft and engines rose 45.83% to Rs.400.73 crore against Rs.274.80 crore a year ago.
“There is no reason for Kingfisher to continue without being liquidated. The only plausible reason is that Mallya is still waiting and hoping for a foreign investor,” said Bharat Mahadevan, who until recently was regional manager for north-east Asia at Jet Airways (India) Ltd.
Kingfisher’s operating licence was suspended in October by aviation regulator Directorate General of Civil Aviation (DGCA) following a strike by the airline’s employees. The permit has since expired, although it can be renewed within two years.
The group of 14 lenders led by State Bank of India (SBI) expects to recover at least Rs.1,000 crore as it starts taking possession of buildings, helicopters and other fixed assets of the grounded airline.
The consortium collected Rs.550-600 crore in the first phase by selling pledged shares of associate companies of Kingfisher Airlines’s parent UB Group.
The Indian aviation sector is set to see increased competition as more airlines are readying to fly. Tata Sons Ltd has floated two joint ventures to run airlines, one with Singapore Airlines Ltd for a full-service airline and another with Malaysia’s AirAsia Bhd for a low-fare carrier, after the government relaxed foreign direct investment (FDI) rules for the sector. Both ventures are awaiting regulatory clearances.