Cost control helps Kingfisher pare losses by 13%

Written by fe Bureaus | Mumbai | Updated: Oct 29 2009, 06:15am hrs
Vijay Mallya-controlled Kingfisher Airlines on Wednesday said it trimmed losses by 13% to Rs 418.7 crore in the quarter ended September 30, 2009, compared to a net loss of Rs 483.2 crore in the year-ago period, on the back of operational restructuring and stringent cost control measures. Revenues, however, shrunk 13.6% to Rs 1,142.14 crore during the quarter as against Rs 1,322.64 crore in the corresponding period last fiscal.

The airline showed a positive EBIDTA of Rs 44 crore for the quarter against a loss of Rs 207 crore in the corresponding quarter in the previous financial year for its domestic operations.

The performance is noteworthy in the backdrop of intense competition and a lean monsoon traffic season leading to an overall pressure on yields. Certain technical issues also led to grounding of aircraft, causing revenue loss and hence a negative impact on the bottom line, said the company in a statement.

Shares of the company closed at Rs 47.95, down 0.1% on the Bombay Stock Exchange. The airline increased its guest count by 9% on a year-on-year basis despite a capacity reduction of 17% in the domestic market. Competitor Jet Airways, which announced its Q2FY10 results on Tuesday, saw its losses widen 5.6% and revenues decline 25% during the quarter.

Kingfisher continued its international expansion, adding the Kolkata-Bangkok sector during the quarter using single aisle aircraft, thereby increasing the block hour usage of the same aircraft deployed on domestic routes.

Kingfisher also suspended its operations on the Bangalore-London and Bangalore-Colombo routes and has started two new routes from Mumbai to Hong Kong and Singapore.

Entering the industrys peak quarter, the company expects to show higher guest numbers and much stronger yields in third quarter FY10 the statement said.

It continues to lead the domestic industry with a singular market share of 23.3% in September 2009 and with innovative products such as digital coupons, it added.