UB Group-controlled Kingfisher Airlines managed to narrow its losses by 38 per cent to Rs 1,027 crore in 2010-11 from Rs 1,647 crore in the previous year. It posted 23 per cent growth in top line at Rs 6,496 crore on the back of higher demand, stable yields and higher aircraft utilisation.
Kingfisher Airlines has been facing a tough financial situation and had to get special approval from the Reserve Bank of India for a debt recast in December 2010. According to a company statement, the aviation industry witnessed 20 per cent growth in 2010-11 and it (Kingfisher) managed to effectively capitalise on the increase in demand to achieve a 10 percentage point rise in domestic load factor.
Net loss as a percentage of total revenue reduced from 31.3 per cent to 15.8 per cent. Besides the improvement in operating performance, this was a result of the debt recast completed in December 2010. According to the debt recast, the airline will have a moratorium of two years for payment of principal and close to Rs 900 crore will be converted into equity from its lenders. The rest of the debt of around Rs 6,000 crore has been agreed to be paid over the next few years.
It reported an operating profit of Rs 140 crore, compared to a loss of Rs 690 crore. “This is an improvement of Rs 830 crore. Several cost reduction initiatives and growing maturity of international routes were the major contributors to the improvement,” the statement said.
