Hit by falling passenger demand, Kingfisher to raise Rs500 crore
30 July 2009
Kingfisher Airlines Ltd, owned by liquor baron Vijay Mallya's UB Group, yesterday said that its loss for the first financial quarter ending 30 June had widened, hit by falling passenger demand due to the global slowdown.
Its net loss in April-June increased to Rs240 crore, compared to a loss of Rs158 crore in the year-ago period, India's largest carrier by marketshare said in Mumbai on Tuesday. It has returned aircraft and also postponed deliveries, and has moved 70 per cent of its network to single class low fare options.
The company, which has a debt burden of about Rs6,000 crore, says it is planning to go for a rights and depository issue to raise Rs500 crore, which cheered market sentiments.
Revenue for the quarter fell 6 per cent to Rs1,314 from Rs1,398 billion rupees as a slowing global economy sapped demand for air travel.
Kingfisher's spending on jet fuel purchases, its single-biggest expense, declined 53 per cent to Rs414 crore as local oil marketing companies cut prices in line with falling global crude oil prices. Jet fuel comprises about 40 per cent of the operating costs of an airline in India.
Kingfisher currently has outstanding debt of Rs6,500 crore, of which Rs1,200 crore rupees is for buying new planes. The company registered positive earnings before interest, taxes, depreciation, amortisation and rent of Rs254 crore in the first quarter, compared with a net loss of Rs324 crore a year earlier.
Kingfisher, which has a fleet of 74 Airbus planes, returned 11 aircraft to lessors in the first quarter to cut capacity amid the slowdown in global air travel. It has also deferred delivery of 32 of 48 Airbus A320 planes that were due to arrive in 2008 and 2009.
Kingfisher also has pending payments to oil marketing companies, which piled up when oil prices were at their peak last August. As of 31 May, Kingfisher owed Rs950 crore to India's oil marketing companies - Indian Oil, Hindustan Petroleum and Bharat Petroleum.