Kingfisher Airlines shrinks losses

Kingfisher Airlines shrinks losses

Mumbai: India’s second largest airline by traffic, Kingfisher Airlines Ltd, on Friday reported a net loss of Rs1,647.22 crore for the fiscal ended March, down 23.01% from a net loss of Rs2,139.65 crore for fiscal 2009.

The airline’s improved performance was from better seat occupancy and cost reductions, even as sales dipped to Rs5,067.91 crore, 3.26% less than Rs5,238.98 crore in fiscal 2009.

In a statement, the airline said the carrier registered an improvement of Rs1,047 crore in operating losses.

Operating losses for fiscal 2010 stood at Rs899.36 crore against Rs1,806.64 crore in the previous fiscal.

Core operating losses before tax and other income stood at Rs414.42 crore in fiscal 2010 against Rs856.51 crore loss the previous year.

Other income more than tripled to Rs203.12 crore from Rs63.60 crore in fiscal 2009.

Kingfisher Airlines, however, did not declare its financial results for the quarter ended March 2010.

This performance was despite extraordinary items totalling more than Rs640 crore, the airline said in a statement. These included Rs240 crore in expenses for grounded aircraft, over Rs400 crore from premature termination of aircraft lease, foreign exchange losses and general clean up after the integration of Air Deccan.

Kingfisher Airlines, owned by liquor baron Vijay Mallya, in 2007 acquired Deccan Aviation, but was hit by the global economic slowdown even before the integration was complete.

In contrast, Jet Airways (India) Ltd, India’s largest airline, widened its net loss to Rs467.64.crore in fiscal 2010 from Rs402.34 crore in the previous fiscal. However, it posted a 10.54% increase in profit for quarter ended March, signalling a revival in air traffic.

In its note to investors, Kingfisher said the company adopted a new accounting standard that allows cost incurred on major repairs and maintenance to be amortized over the incremental life of the asset.

“The company has applied the same treatment to costs incurred on major repairs and maintenance for engines pertaining to aircraft acquired on operating lease. Had the company not adopted this method of accounting, the loss before tax for the year would have been higher by Rs163.90 crore," it said.

The shares of Kingfisher Airlines on Friday rose 3.57% to close at Rs42.10 each on the Bombay Stock Exchange, while the benchmark index, the Sensex, gained 1.18% to close at 16,863.06 points.