KFA narrows FY10 loss by 23%

Kingfisher Airlines (KFA), owned by Indian billionaire Vijay Mallya's liquor-to-airlines UB Group, narrowed its loss by 23 per cent to Rs 1,647.22 crore in the financial year 2009-10, on the back of an improved environment in the aviation industry and rising load factor. Total revenues, at Rs 5,271 crore, dropped just a per cent from the previous year.

The airline, while maintaining its top line, derived further efficiencies in its operations and also slashed capacities by as much as 17 per cent, which resulted in a 60 per cent decrease in its operating losses at Rs 696 crore.

Earnings before interest, taxes, depreciation, amortisation and rentals (Ebitdar) profit for the company was Rs 398 crore, against a loss of Rs 558 crore in the previous financial year. Airline companies use Ebitdar to measure their operating parameter as it includes the rentals they pay for the aircraft — a major cash outflow.

While domestic Ebitdar stood at Rs 598 crore in 2009-10 against a loss of Rs 251 crore in the previous financial year (an improvement 13 per cent in margin), the fledgling international operations' Ebitdar was still in the red, but narrowed 35 per cent to Rs 200 crore from the previous financial year.

On the back of the narrowing loss, high operating efficiency and increasing load factor, the private carrier is hoping to perform better in the current fiscal. “Kingfisher has budgeted for a profitable year ahead, primarily driven by growth in premium traffic and significant reduction in costs,” the company said in an investor presentation.

It also said yield improvements witnessed in the last two quarters were expected to continue, given the decreasing demand-supply gap. The statement also added the airline witnessed a 27 per cent increase in load factor during April 2010, compared to the same month in the previous year.