Kingfisher doubles loss on fuel costs, net worth eroded

India's cash-strapped Kingfisher Airlines on Tuesday reported a doubling of its loss in the fiscal second quarter on higher fuel prices and operating costs, amid investor worries about its future. The company said it has suffered "substantial losses" and its net worth has been eroded.

Kingfisher Airlines has reported that its net loss doubled to Rs 468.66 crore in the quarter ended September 30, 2011, as higher fuel prices depressed operating margins.

The debt-ridden carrier had reported a net loss of Rs 230.81 crore in the same period last year, Kingfisher Airlines said in a regulatory filing to the Bombay Stock Exchange.

The company's income from operations, however, rose by 10.5% to Rs 1,528.16 crore in the July-September quarter from Rs 1,382.72 crore in the year earlier period.

Meanwhile, shares of the company were trading at Rs 21.50 a piece, up 0.70% from their previous close on the BSE at 9.30 am.

Banks are likely to push for fresh fund raising of around Rs 800 crore, if the airline want a next round of funds from lenders.

"We have asked Kingfisher to raise some fresh funds if banks are to at all consider their request for restructuring" said Hemant Contractor, MD, SBI.

Kingfisher has been asked by its creditors to raise $160 million in equity and the carrier is considering a proposal to sell real estate to help pave the way for a debt restructuring, a banker said on Monday.

The carrier's net loss in the quarter ended Sept 30 rose to 4.69 billion rupees ($93 million) from 2.31 billion rupees in the year-ago period, the company said in a statement to the stock exchanges.

Aircraft fuel expenses in the quarter rose 70% to 8.17 billion rupees, it said.

The carrier has become one of the main casualties of high fuel costs and a fierce price war between a handful of airlines which, between them, have ordered hundreds of aircraft for delivery over the next decade in an ambitious bet on the future.

The lenders -- a 13-bank consortium led by SBI, who were yet to decide on ways to soften the troubled airline's Rs 7,057.08 crore debt burden -- are due to meet Kingfisher management today.

Kingfisher had suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore. The airline has cancelled several flights over the past few weeks.

Kingfisher to cancel 31 flights daily till Nov 19 - report

India's No. 2 carrier Kingfisher Airlines, controlled by liquor baron Vijay Mallya, plans to cancel 31 flights daily till Nov 19, including four international flights to Bangkok, the Mint newspaper reported, citing an unnamed airline official.

The cash-strapped carrier, which has not reported a profit ever since it got listed and has undergone debt restructuring Once, has decided to cancel 27 domestic flights, the paper said, without specifying a reason.

The cancellations include Delhi, Mumbai, Bangalore, Chennai, Kolkata and Hyderabad routes, the report said.

About a dozen of Kingfisher's aircraft are already out of service because of maintenance and other issues, the report said.

Kingfisher had cancelled around 20 flights from Delhi on Monday, due to a lack of aircraft, a Delhi airport official who declined to be named, told Reuters.

Kingfisher Airlines officials and a spokesman were not immediately available for comment when contacted by Reuters.

On Oct. 13, the airline had faced a disruption in flights after state-run oil marketer HPCL temporarily halted fuel supplies, citing non-payment of dues.

Last week, Kingfisher said it has sought further cushion from banks to ease its debt burden, but denied it was seeking another debt restructuring.

Earlier, Kingfisher's auditors raised questions about its viability and said it needed capital infusion to survive.

Shares in Kingfisher, valued at about $240 million, have lost 64 percent of its value so far this year. At 10:45 a.m. (0515 GMT), the stock was down 0.85 percent at 23.45 rupees in a choppy Mumbai market.

IndiGo hires 35 Kingfisher Airlines pilots

MUMBAI: Budget carrier IndiGo has hired 35 pilots from rival Kingfisher Airlines over the past six to eight months, sources told ET.

Gurgaon-based IndiGo, which kicked off its expansion plans with one of the largest aircraft orders in the industry earlier this year, is looking to hire aggressively. The hired pilots are said to be senior in rank, operating Kingfisher's ATR and A320 fleet.

At least half of them are from Kingfisher' ATR fleet
"We have a requirement of 700-800 pilots over the next five years," IndiGo said in a reply to a mail sent to it over the issue. One of the pilots from Kingfisher said: "IndiGo has promised pilots from Kingfisher a command position within a fixed time on its A320 type and will impart conversion training from small aircraft to single-aisle A320."

India's aviation sector does not allow poaching and pilots must serve a six-month notice to their employer before moving on to anew assignment.

But industry sources said airlines have been cross hiring over the past one-year, as some airlines, such as Vijay Mallya-promoted Kingfisher, are expanding slowly while some struggling ones, such as Air India, have pilots scouting for jobs. Such pilots serve as a good resource for the fast-growing domestic aviation sector that is grappling with a shortage of trained pilots.

The sector is currently growing at 18%. Aircraft maker Boeing has forecast a $150-billion market for 1,320 new passenger airplanes in India over the next 20 years. Domestic air traffic growth through 2014-15 is forecast to touch 16.7% per annum.