Mumbai: Kingfisher Airlines Ltd said third-quarter loss widened to Rs.755.17 crore from Rs.444.26 crore in the year earlier because of high finance costs, redelivery of planes and costs associated with the grounding of planes. The grounded airline did not report any revenue during the quarter ended 31 December compared with Rs.1,367.71 crore a year ago.
Kingfisher’s operating licence was suspended in October by regulator Directorate General of Civil Aviation (DGCA), following a strike by the airline’s employees. The licence has since expired, although it can be renewed within two years.
“During the quarter under review Kingfisher Airlines did not have any operations. The company submitted a revival or restart plan to the DGCA for renewal of its scheduled operator’s permit and for restart of operations. After accounting for finance cost of Rs.401 crore, a one-time cost of Rs.275 crore due to re-delivery of aircraft (which will reduce lease rentals and other related costs going forward), the net loss was Rs.755 crore. Kingfisher has made significant progress towards complying with the DGCA requirements,” the company said in a statement on Tuesday.
Auditor BK Ramadhyani and Co. said the unaudited working results for the quarter ended 31 December for Kingfisher would have been a loss of Rs.1,090.34 crore as against the reported loss at Rs.755.17 crore had the company treated aircraft maintenance and aircraft purchase costs as per generally accepted accounting standards.
The aircraft rental cost was at Rs.182.09 crore for the report quarter, while other operating cost for Kingfisher was at Rs.139.41 crore.
On 16 January, Kingfisher Airlines informed DGCA that the airline had secured some no-objection certificates from aircraft leasing and oil marketing companies. But DGCA maintained the airline should get no-objection certificates from lenders and airport operators as well.
On 20 January, a core group of lenders asked grounded Kingfisher to infuse at least Rs.800 crore into the airline before the banks considered any further loan recast and the extension of a no-objection certificate that would enable the airline to resume flights.
The airline has held creditors and employees who have not been paid salaries for several months at bay by holding out the promise of a revival, infusion of funds by promoters, and the entry of a foreign investor. None of these have happened so far.
At its peak, Kingfisher Airlines was flying 66 planes to 68 locations, including eight international destinations, with 374 flights a day, and accounted for 20% of the market. In a 10 January letter to employees, Vijay Mallya reassured them that the airline will begin flying by this summer with a Rs.650 crore infusion from parent UB Group.
State Bank of India (SBI), the leader of the lenders’ consortium, has the maximum exposure to Kingfisher at Rs.1,600 crore, followed by Punjab National Bank (Rs.800 crore), IDBI Bank (Rs.800 crore), Bank of India (Rs.650 crore), Bank of Baroda (Rs.550 crore), United Bank of India (Rs.430 crore), Central Bank of India (Rs.410 crore), UCO Bank (Rs.320 crore), Corporation Bank (Rs.310 crore), State Bank of Mysore, an SBI associate bank (Rs.150 crore), Indian Overseas Bank (Rs.140 crore), Federal Bank Ltd (Rs.90 crore), Punjab and Sind Bank (Rs.60 crore) and Axis Bank Ltd (Rs.50 crore). Overall, their exposure is Rs.6,360 crore, and once the unapplied interest is added, it becomes Rs.7,000 crore.
There are other lenders outside the consortium. They are Srei Infrastructure Finance Ltd (Rs.430 crore), Jammu and Kashmir Bank Ltd (Rs.80 crore) and Oriental Bank of Commerce (Rs.50 crore).
According to consulting firm Centre for Asia Pacific Aviation’s research note released in August 2012, Kingfisher Airlines has a total debt of $2.49 billion including bank debts (approximately $1.1 billion), promoters debts, trade debts and other short term liabilities apart from accumulated losses of $1.9 billion as on 30 June 2012.