Mumbai: Vijay Mallya’s Kingfisher Airlines Ltd, which hasn’t flown since October 2012, continued to pile up losses in the second quarter.

The airline posted a loss of 715.56 crore for the quarter ended 30 September compared with a loss of 753.55 crore in the year earlier, it said on Friday.

With planes remaining on the ground, the airline had zero sales in the reporting quarter, compared with 200 crore in the year-ago period.

Kingfisher Airlines, launched in 2005, has never made a profit.

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.

The Mumbai-based airline has accumulated losses of 16,023.46 crore as on 31 March 2013 and its net worth as on that date is a negative 12,919.82 crore.

“The permit issued by DGCA has lapsed and is awaiting renewal. The consortium of banks that had lent monies to the company has recalled its debt in April 2013. The company has detailed plans for renewal of its operations," the airline said.

It has filed the necessary application to DGCA to renew the permit, and has been exploring various options to recapitalize and resume operations, the airline said in its earnings statement.

“The company will also request the banks at an appropriate time for debt restructuring. Based on the detailed evaluation of the current situation, plans formulated, and active discussions under way with prospective investors, the management is confident on raising adequate finance, obtaining renewal of the permit rescheduling debt, and receiving continued support from the group," it said.

On 24 September, Mallya said his airline is in talks with a “foreign" investor to get funds for a restart and may conclude the discussions within 90 days but declined to elaborate.

“All I can say is that it is a foreigner. I’m not at liberty to give further information because of strict confidentiality clauses. Given all that has been speculated, this investor is very, very sensitive to identities being revealed," Mallya told reporters after the airline’s annual general meeting.

While announcing earnings on Friday, Kingfisher Airlines said the company will realize its assets and discharge liabilities in the normal course of business.

“Accordingly, the financial results 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," the airline said.

In August, the lenders of Kingfisher Airlines had taken possession of its headquarters building at Vile Parle in Mumbai and started proceedings to sell the office.

The group of 14 lenders led by State Bank of India expects to recover at least 1,000 crore as it starts taking possession of buildings, helicopters and other fixed assets of the grounded airline.

The consortium collected 550-600 crore in the first phase by selling pledged shares of associate companies of Kingfisher Airlines’ parent UB Group.

Shares of Kingfisher Airlines on Friday fell 1.05% to 5.64 on BSE, while the exchange’s benchmark Sensex fell 0.75% to 20,666.15 points.

On Thursday, low-fare airline SpiceJet Ltd reported a record loss of 559 crore led by a steep fall in the value of the local currency against the dollar, high aircraft maintenance costs and poor demand.

On 23 October, Jet Airways (India) Ltd reported a loss of 998.51 crore for the September quarter.

The October-December period is usually the busiest quarter for local airlines as inflow of foreign tourists and the festival season bolster demand. This is followed by a slower January-March quarter.

The Indian aviation sector is set to see increased competition as more airlines are readying to fly. Tata Sons Ltd has floated two joint ventures to run airlines, one with Singapore Airlines Ltd for a full-service airline and another with Malaysia’s AirAsia Bhd for a low-fare carrier, after the government relaxed foreign direct investment rules for the sector. Both ventures are awaiting regulatory clearances.

pr.sanjai@livemint.com

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