Shares of Vijay Mallya-promoted Kingfisher Airlines were hit hard on Wednesday, following reports that lessors had taken back 34 of its aircraft due to non-payment of lease rentals.
In the morning trade, the airline’s stocks plunged 13 per cent to Rs 11.62 on the Bombay Stock Exchange. Later in the day, these recovered to close at Rs 12.35, down eight per cent. The steep fall came on a day when the benchmark indices rose about 0.4 per cent.
According to reports, during the March-June period, lessors had taken back a number of the company’s aircraft, owing to non-payment of lease rentals of about Rs 1,000 crore. The airline, however, said it had returned these aircraft voluntarily, adding no aircraft was taken by lessors by “force”.
Kingfisher Airlines, which is sitting on a debt pile of about Rs 7,500 crore and had reported a loss of Rs 1,151.5 crore for the quarter ended March. While the operating costs increased, passenger numbers and revenue declined, as the airline cut flights and withdrew its international schedule. Five wide-bodied Airbus A330s have been sent back for overhaul and engine and cabin reconfiguration.
Earlier this year, the International Air Transport Association had suspended Kingfisher Airlines from the billing settlement plan, a payment mechanism used by agents. This has affected sales for the airline.