Kingfisher Airlines reduces losses

Kingfisher Airlines, India’s second largest private airline company by revenue, managed to reduce its losses during the third quarter of this financial year, as passengers taking domestic flights increased by 31 per cent, compared to the corresponding quarter last year.

The company, part of the UB Group, the country’s largest purveyor of alcoholic drinks, has posted a 2 per cent increase in net loss to Rs 420 crore for the third quarter. The airline, owned by flamboyant billionaire Vijay Mallya, has also posted a 5 per cent decline in total income to Rs 1,370 crore.

The company has managed to stem further losses by cutting capacity by 17 per cent and posted its highest ever seat factor (a measure of utilisation) of 80.2 per cent during December. Kingfisher says ATF (aviation turbine fuel) prices rose by 20 per cent during calendar 2009, leading to more payout of taxes. Officials said that they also set aside Rs 101 crore for an exceptional and non-recurring item, which they would not elaborate.

Kingfisher has debt of Rs 6,000 crore, a leverage of around 15 times. It is in the market to raise Rs 1,000 crore in the near future, either through a rights issue or one of global depository receipts.

The company said it had managed to stem its operating losses to Rs 77 crore during the third quarter as against a loss of Rs 297 crore during the corresponding period last year.