Kingfisher shares tank as lessors take back 34 planes
Shares of Kingfisher Airlines on Wednesday tumbled over 13% in morning trade on the Bombay Stock Exchange, following reports that lessors have taken back 34 aircraft due to non-payment of lease rentals.business Updated: Jun 28, 2012 00:12 IST
Shares of Kingfisher Airlines on Wednesday tumbled over 13% in morning trade on the Bombay Stock Exchange, following reports that lessors have taken back 34 aircraft due to non-payment of lease rentals.
The company’s shares plunged 13.5% on the BSE, before recovering to close at close down 8% at Rs.12.
The Vijay Mallya-promoted airline, however, denied reports that it had defaulted on lease rentals saying it had voluntarily returned aircraft.From a fleet of 64 aircraft, KFA’s fleet is down to 16 and the airline operates around 100-odd domestic flights daily. It has discontinued its global operations.
“We categorically deny that outstanding dues to lessors are Rs.1,000 crore,” said a KFA spokesperson. “This would imply that lease rental at Rs. 2 crore per month per Airbus would be outstanding for 14 months for 34 Airbus aircraft. In fact, we are currently in agreed payment terms to lessors. We have voluntarily returned aircraft surplus to our requirements.”
The airline, which hasn’t made a profit since its inception in 2005, has seen an exodus of pilots and engineers in recent times. From being the second-largest domestic carrier in July last year with a marketshare of 19%, its share was 5.2% in May making it the smallest schedule carrier.
The airline hasn’t paid employees salaries since February. Salaries of January were disbursed only after pilots threatened to stop flying.