Kingfisher Airlines' fourth-quarter net loss more than trebled as huge cuts in the number of flights compounded the woes of a cash-strapped carrier facing high fuel prices and intense competition for low fares.
The high-profile airline, which is owned by flamboyant liquor baron Vijay Mallya, lost Rs 1,150 crore in the quarter to end-March, compared with a loss of Rs 360 crore a year earlier.
Kingfisher, which was India's No. 2 airline until a year ago, has been the biggest victim of turbulence in India's aviation industry, where six main carriers face a total debt load of $20 billion and $2 billion in annual losses.
It is now the smallest carrier in India by market share. Shares in the airline have plummeted more than 80% since the beginning of 2011, shrinking the airline's market value to just under $100 million.
Kingfisher shares slumped as much as 6.3% in early trading on Thursday to a record low of Rs 10.35.
The carrier blamed losses on high fuel prices, a weak rupee and an "unprecedented, tough operating environment," but said it would return to normal services within 12 months.
"The company has a focused fleet re-induction plan and hopes to be back to full-scale operations in the next 12 months backed by a recapitalization plan that the company is actively pursuing and confident of achieving," it said in a statement on Thursday.
National carrier Air India has been forced to cut most of its international routes due to industrial action by its pilots, handing Jet Airways an opportunity to increase aggressively its market share in international routes.
Low-fare and mostly domestic carriers such as IndiGo - the only airline making money in India - and SpiceJet have also gained market share recently as Kingfisher and Air India have suffered.
SpiceJet said on Wednesday that its net loss for the January-March quarter had widened more than four-fold, but it expected lower costs once the company starts importing jet fuel directly.
Kingfisher needs at least $500 million immediately to keep flying, according to the Centre for Asia Pacific Aviation, but there has been no sign of funding in the near term.
The company said its net loss for the year to end-March was Rs 2,330 crore, more than double its loss in the previous fiscal year.
India's plans to allow foreign airlines to invest up to 49% in local carriers - for which Kingfisher has lobbied hard - has not yet taken off, adding to its funding crisis.
Mallya has repeatedly insisted that several domestic and international investors are interested in his company, and for months the names of many foreign airlines and local tycoons have been reported as prospective White Knights, but so far there has been much talk and no money.
If Kingfisher fails to turn the airline around, its banks - which have $1.3 billion in loans outstanding - would be left to pick over the carcass in a country that does not have a formal bankruptcy process.
Loans are secured in part by a combination of guarantees by the airline's parent, the UB group, as well as Kingfisher shares, Mallya's personal guarantees, its Mumbai real estate assets and the Kingfisher brand itself, bankers said.
European planemaker Airbus, which has accommodated Kingfisher by pushing its aircraft deliveries back in the queue, would lose outstanding orders for 92 planes with a combined list price of $12 billion. It would also see Kingfisher's fleet enter the second-hand market.