Business

Kingfisher Airlines losses double on higher fuel costs

  • 15 November 2011
  • From the section Business
Sign outside Kingfisher check-in counter
The airline has cancelled hundreds of flights amid reports of unpaid fuel bills and other dues

India's Kingfisher Airlines has reported a doubling in losses between July and September, fanning fears about its future.

The airline said it made a loss of 4.69bn rupees ($93m; £58m) during the period, compared with 2.31bn rupees last year.

The loss comes amid cashflow problems for the carrier that have seen it cancel hundreds of flights.

The airline said higher fuel costs hurt its earnings during the period.

Growing problems

India's second-biggest airline has not posted a net profit since it started operations in May 2005 and is about $1.2bn in debt.

The carrier's problems have gone from bad to worse in recent months as it has found it difficult to raise fresh capital, resulting in reports of unpaid fuel bills and other dues.

Creditors have already asked the company to raise $159m in equity so that its debts can be restructured.

The State Bank of India, the airline's biggest lender, has warned that it must come up with a credible business plan before any restructuring of its debts.

Dozens of pilots have reportedly left the airline over the past few months, although Kingfisher has maintained it reflects a normal turnover of staff.

In September the airline shut its budget carrier, Kingfisher Red, saying it no longer intended to compete in the low-cost market.

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