The aviation industry’s big crunch, pushed by an economic slowdown and aggravated by jet fuel prices, is making the glamorous Kingfisher Airlines bleed a deep shade of its trademark colour, red.
Losses more than doubled in the latest quarter over the year-ago period, as the cost of launching international operations and the digestion of the ailing Air Deccan that it acquired showed up on its books.
Baron Vijay Mallya’s Kingfisher reported a loss of Rs 413 crore for the quarter ended December 31, 2008 at the weekend, with the red blob more than doubling from the Rs 190 crore loss reported by the carrier in the quarter ended December 31, 2007.
The airline showed a loss of Rs 1,054 crore for the nine months ended December 2008 against a loss of Rs 617 crore loss reported for the same period last financial year.
However the figures are not comparable since the losses this year are for Kingfisher-Deccan’s integrated operations, whereas last financial year’s losses reflect only Deccan Aviation’s operations. Kingfisher got listed on the exchanges through the Deccan buy.
According to a statement issued by the airline, these losses also include Rs 174 crore of initiation costs to launch international operations.
“The airline was also affected by the exchange rate impact of dollar denominated expenses to the tune of approximately Rs. 60 crore and interest expenses during the third quarter which increased by Rs 103 crore as compared to the same period last financial year,” the statement said.