Kingfisher hasn't deposited two years' TDS with govt

The list of negatives on Kingfisher Airlines is getting longer. Union minister of state for finance S S Palanimanickam on Tuesday told Parliament that the Vijay Mallya-run airline hasn’t deposited with the government most of the income tax it deducted from staff pay for the past two financial years.

“Kingfisher has about Rs 130 crore of tax deducted at source to be deposited with the government and has committed to pay it by the end of the current financial year,” was his written reply to a query in this regard. A Kingfisher spokesperson declined to comment.

This default is a small part of the Kingfisher dues. It owes at least Rs 600 crore, for instance, to oil marketing companies and Rs 400 crore to various airport operators. The carrier reported a net loss of Rs 468 crore for the quarter ended September, though revenue grew 10.2 per cent to Rs 1,528 crore. It has accumulated losses of a little over Rs 7,000 crore and owes Rs 6,500 crore to banks.

The Rs 7,000-crore debt payment has been restructured. The package included converting about 30 per cent of this into capital and converting a loan of Rs 735 crore from parent company UB Holdings to the airline into equity. About Rs 1,400 crore of debt to banks has also been converted into equity and the banks have booked mark to market losses (writing down assets to reflect current values) in the first two quarters of the current financial year.

Kingfisher has also recently brought down the number of flights it operates daily in the domestic sector, to 46 destinations from the earlier 59 cities. Total flights are down to 260 from the earlier 350. Analysts feel the financial position would not improve unless it gets funds from outside.

“Kingfisher immediately needs infusion of money in the range of at least Rs 1,500 crore and until that happens, things will worsen,” said a Delhi-based analyst who did not want to be identified.