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Kingfisher Airlines’ net loss widens in Q1

Kingfisher Airlines’ net loss widens in Q1
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First Published: Thu, Aug 11 2011. 12 27 AM IST
Updated: Thu, Aug 11 2011. 12 27 AM IST
Mumbai: Kingfisher Airlines Ltd’s net loss in the June quarter (Q1) increased sharply to Rs 263.54 crore from Rs 187.34 crore a year ago mainly because of high fuel costs and a shift in the market towards low-fare travel.
A Bloomberg survey of analysts had estimated a loss of Rs 392.95 crore.
Revenue increased 14.6% to Rs 1,881.64 crore.
The April-June quarter is usually a period of high traffic for local airlines owing to school holidays, second only to the October-December festival season. This year, though, has been tough for the airlines.
Jet Airways (India) Ltd, the country’s largest airline by passengers carried, reported a loss of Rs 123.16 crore for the June quarter against a profit of Rs 3.52 crore a year earlier.
The only other listed airline in India, SpiceJet Ltd, is yet to announce quarterly results.
Aircraft fuel cost for Kingfisher Airlines rose 44.32% to Rs 845.13 crore in the quarter.
Kingfisher Airlines, the country’s second largest airline, said the momentum in India’s aviation industry continued in the first quarter of this fiscal year, with demand growing at 15%.
“Even though the capacity growth at 19% slightly outpaced the demand growth, Kingfisher Airlines effectively capitalized on its strengths to achieve a 4 percentage points increase in domestic load factor. In the same period, industry load factors experienced a decline of 2 percentage points,” the airline said in a statement on Wednesday.
Kingfisher Airlines has adopted a new accounting method that allows costs on major repairs and maintenance to be amortized over the incremental life of the asset. Had the company not adopted this method, it loss after tax for the quarter would have been higher by Rs 26.23 crore, it said.
In a note to investors, the airline said it has incurred substantial losses and its net worth has eroded. “However, having regard to improvement in the economic sentiment, rationalization measures adopted by the company, fleet recovery and the implementation of the debt recast package with the lenders and promoters including conversion of debt into share capital, these interim financial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities,” it said.
Kingfisher Airlines shares rose 2.57% to close at Rs 31.90 apiece on Wednesday on BSE. The Sensex gained 1.62% to end at 17,130.51.
A consortium of 13 lenders, including State Bank of India (SBI) and ICICI Bank Ltd, recently bought a 23.21% stake in Kingfisher Airlines, stopping short of gaining more say in the airline with a slightly enhanced holding. SBI picked up a 5.67% stake and ICICI Bank 5.3%.
Kingfisher Airlines converted Rs 750 crore of its total debt of Rs 7,000 crore into equity at a 61.6% premium over its share price. It allotted shares to lenders on 31 March at Rs 64.48 a share.
SBI Capital Markets Ltd scripted the debt restructuring plan for Kingfisher Airlines.
pr.sanjai@livemint.com
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First Published: Thu, Aug 11 2011. 12 27 AM IST