Vijay Mallya-led Kingfisher Airlines on Thursday reported a 75% year-on-year jump in net losses at Rs 444 crore for the quarter ended December against Rs 254 crore a year-ago, plunging the bleeding carrier further into a financial crisis that threatens its survival.
Cash-strapped KFA has grounded nearly one-third of its fleet and is struggling to pay salaries to employees. The airline's operating revenue declined 19% year-on-year to Rs 1,342 crore compared to Rs 1,659 crore in the year-ago period and passenger revenue declined by 16%.
"The company has incurred substantial losses and its networth has been eroded," KFA said in a statement. "Steep depreciation in the Indian rupee coupled with consistently high crude oil prices has led to a challenging quarter for the Indian aviation industry," it said.
Aviation experts said that the future looked bleak for KFA with no signs of fresh equity injection.
"Losses are on expected lines," said Kapil Kaul, South Asia CEO, Centre for Asia Pacific Aviation, an aviation consultancy firm. "Reduction in operations have resulted in significant reduction in losses."
"Fuel and interest alone are approximately 70% of the total revenues which reflect the critical difficulties that KFA is facing. KFA requires $400-500 million immediately and the delay in raising funds will make turnaround very difficult," he added.
"Funding delay beyond March 31, 2012 will seriously raise risk profile. However, promoter commitment to manage a very difficult situation continues to be exceptionally strong. Funds requirements will have to largely through equity as KFA cannot afford further debts," he said.
State Bank of India has already declared KFA loans as non performing asset, which means further assistance from banks is ruled out.
From being India's second-largest carrier in July with a market share of 19%, KFA is now relegated to the fifth place.