Private carrier Kingfisher Airlines? net loss for the quarter ended June 30, 2009, widened 58% at Rs 243 crore as against Rs 158 crore for the same period a year ago. Sales for the period declined 6% at Rs 1,314 crore compared to Rs 1,398 crore, mainly on account of declining loads factors.
Analysts whom FE talked to are of the opinion that losses could be associated with the recent start up of international operations by the carrier which have failed to show results. “International operations take at least three years to break-even,” said an analyst, adding that ensuring optimal and efficient utilisation of its fleet coupled with good loads and yields was a big challenge on start-up international operations.
Kingfisher launched its international operations in September 2008 on the Bangalore-London sector. Currently, the carrier flies to Colombo, Dhaka and Dubai and has plans to introduce flights to Singapore, Hong Kong and Bangkok soon. However, the company has mentioned that the aggregate turnover of international operations did not exceed 10% of the total turnover of the company and hence they have not given any disclosure of geographical segments.
Meanwhile, fuel expenses of the carrier, the biggest expenses, declined 52% to Rs 414 crore as local oil marketing companies had cut prices in line with falling global crude oil prices. Shares of Kingfisher close at 52.90, up 2.22% from the previous day’s close on the Bombay Stock Exchange.
During the quarter under review, aircraft lease rentals have gone up to Rs 297 crore as against Rs 250 crore. The employee cost has gone down to Rs 156.25 crore as against Rs 207.57 crore.
The carrier has decided to raise Rs 500 crore by the way of equity. This was decided in the board meeting held on Tuesday. The company, which has a debt burden of about Rs 6,000 crore, said that they were planning to go for a rights and depository issue, for the proposed fund raising. It is understood that the company is in the process of appointing a merchant banker to expedite the process.