Shares of Kingfisher Airlines advanced to their daily upper price circuit despite reporting a loss in the 1Q as the troubled carrier says that it is in talks for funds with several investors.
Vijay’s Mallya’s Kingfisher Airlines posted net loss in the 1Q at Rs.6.5bn, wider than the Rs.2.6bn loss posted a year earlier, the company said. Sales declined 84% to Rs.3bn.
Kingfisher shut 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.
According to reports, Kingfisher is in talks with IATA for regaining access.
The airline pledged its brand, office furniture and other assets against Rs.64.2bn of debt. It has delayed salaries to employees and also failed to pay banks, airports, tax authorities and fuel suppliers.
Kingfisher has asked banks for additional loans as its market share declined and it struggled to pay salaries to its staff and interest on debt accumulated for leasing planes.
The debt-ridden airline is operating 20 planes as it cut services to about 120 flights a day, compared with 66 aircraft and about 340 daily flights in March 2011. As of June, Kingfisher’s market share, once second-biggest among Indian carriers, dropped to 4.2%.
Mallya has been pushing for Foreign Direct Investment by overseas carriers in Indian airlines to reduce Kingfisher’s debt burden.
In India at present, foreign carriers are prohibited from making direct investments into the aviation sector, however, financial and non-airline investors can invest up to 49% in the sector.
Shares of Kingfisher Airlines were locked in the 20% upper price circuit at Rs.8.88. It had touched a day’s low of Rs.7.01. The total traded quantity of the shares stood at 120.91 lakh shares on the BSE.