Rs 1,081 cr blow to Kingfisher
Kingfisher Airlines Ltd made a consolidated operating loss of Rs 1,081 crore in the first half of fiscal 2009 after its March 2008 merger with Deccan Aviation Ltd, reports PR Sanjai.india Updated: Nov 01, 2008 02:09 IST
Kingfisher Airlines Ltd, India’s second largest private airline by passengers carried, made a consolidated operating loss of Rs 1,081 crore in the first half of fiscal 2009 after its March 2008 merger with Deccan Aviation Ltd, according to a presentation made to its investors in Bangalore in late September that has been reviewed by Mint.
The loss, made largely on account of high fuel costs, is the first financial detail of the airline’s consolidated operation that is coming to light.
Last week, Kingfisher Airlines announced a loss of Rs 188 crore for the nine-month period ended 30 March on revenue of Rs 1,441.4 crore. Those numbers, however, were just the financials of the erstwhile Deccan Aviation which got merged with Kingfisher.
In June 2007, Kingfisher acquired a 26% stake in Deccan Aviation, which was operating the country’s largest low-fare carrier Air Deccan. The stake was raised to 50% and eventually, in April, Kingfisher was merged with Deccan with the latter choosing to keep the former’s name.
The operating losses of the merged entity are on a total revenue of Rs2,634 crore between April and September when the carrier spent Rs 1,694 crore on fuel, the presentation said.
A company’s operating loss is arrived at before accounting for expenses such as interest, taxation, depreciation and amortisation.
The loss indicates the poor health of Indian airlines that have been hit by higher fuel prices and slowing passenger traffic. Domestic carriers are expected to post a combined loss of $2 billion (close to Rs 10,000 crore) this year.
A year ago, passenger traffic was growing at 40%, in August, it declined by 19%.
With their losses mounting, airlines have started cutting down flights, returning planes to lessors, trimming staff strength and increasing fares.
Owing to high fuel costs, Jet Airways (India) Ltd, India’s largest private carrier, made a net loss of Rs 384.53 crore for the quarter ended 30 September 2008 against a net profit of Rs 28.36 crore for the same period a year ago.
Its wholly owned subsidiary JetLite India posted a loss of
Rs 273 crore for the quarter against a loss of Rs 86.3 crore for the quarter ended 30 September 2007.
The turmoil in the aviation market had seen two arch rivals joining hands for a first of its kind alliance primarily aimed at reducing costs. On 13 October, Kingfisher Airlines and Jet Airways forged an alliance to share infrastructure, jointly purchase fuel and rationalise their network.