Kingfisher shares hit record lows
Shares of Kingfisher Airlines slid to a record low today, on fears that the national aviation regulator may soon ground the debt-laden carrier.india Updated: Mar 26, 2012 17:03 IST
Shares in India's Kingfisher Airlines slid to a record low on Monday, on fears that the national aviation regulator may soon ground the debt-laden carrier.
The firm fell 5.8 % to an all-time low of 16.9 rupees in early trading at the Bombay Stock Exchange, before pulling back to 17.2 rupees, but still down 4.8 %.
The stock's previous record low was 17.55 rupees, hit in November last year.
India's aviation regulator, the Directorate Generate of Civil Aviation, is mulling action against Kingfisher, which could include suspension or cancellation of its flying licence, if passenger safety is considered to be under threat.
The report is due to be submitted to the government in the coming days.
Cash-strapped Kingfisher, which has completely shut down its overseas operations to curtail costs, has never turned a profit since its launch in 2005 and owes millions of dollars to suppliers, lenders and staff.
The carrier is also facing severe disruption to flights due to some pilots refusing to work over unpaid wages and others joining rival carriers.
Kingfisher now operates 18 planes, down from a peak of 64, Aviation Minister Ajit Singh told reporters last week.
"If Kingfisher cannot find a strategic investor to pump in fresh funds soon, there is little hope for the airline," an aviation analyst with a Mumbai brokerage said, declining to be named.
Analysts estimate Kingfisher needs up to $600 million in new funding to survive.
A quarter of the company is owned by local banks and some have refused to lend more cash unless fresh capital is raised and a viable restructuring plan is presented.
Kingfisher's bank accounts were frozen by Indian authorities in February due to the non-payment of taxes and it has since been dropped from a global payments and booking system run by the International Air Transport Association.
India's airline industry -- once a symbol of the country's economic progress -- is now plagued by high fuel prices, fierce competition, price wars and inadequate airport infrastructure, with Kingfisher one of the worst-hit firms.