Kingfisher Airlines debt increases

Mumbai, Feb 7 (TruthDive): Kingfisher Airlines’ revival is not just about infusion of funds but it banks on availability of pilots and trained crew.

Kingfisher Airlines’ loss for the third quarter stood at Rs. 755 crore while last year for the same period it was Rs 444.26 crore which stood at 70%. The airlines auditors – B.K. Ramadhyani & Co. said that the loss was Rs. 1,090 crore if the airline had not calculated costs incurred upon maintenance and repairs of aircraft that were not used. As per Indian auditing norms the accounting method applied by Kingfisher was not the accepted accounting standards practice.

KF owned by Vijay Mallya-led UB Group’s debt stands at Rs 8,000 crore and a similar amount by way of loss and liabilities.

In October 2012, the DGCA citing safety reasons revoked its flying licence due to a strike by pilots and engineers over non-payment of salaries. KF failed to get the creditors to accept the revival and DGCA too found it not specific about the infusion of funds.

Rejecting the revival plan, DGCA officially cancelled on December 31, 2012, stating that it was not able to put for a credible plan. KF in a filing to Bombay Stock Exchange, put Rs 401 crore as finance costs and Rs.182 crore on aircraft leasing charges for the quarter. The company’s share fell by over 3% to Rs 12.24 and further lost 6.7 % in intra-day trade.

The only time the airline posted a profit was in October- December period of 2006 (Rs 9.6 crore), after which it was reporting only losses.

Kingfisher Airlines’ Chairman Vijay Mallya in a letter to employees on January 10 outlines a two-step plan which was submitted to the DGCA in which his UB group of companies will put in Rs 650 crore.

In yet another embarrassment, its Mumbai head office power supply was disconnected for non-payment of bills, sources said. Located inside the commercial complex, The Qube, in suburban Andheri , KF asked its employees not to come to the office till further orders. Pilots have moved the court seeking to wind up the airlines and recover the unpaid salaries.

With demand rising for West Asian airlines, the pilots have moved on to this sector. Aviation industry says that 7000 pilots would be needed in next two years.

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