Quarterly losses have doubled at Indian carrier Kingfisher Airlines amid speculation about its future viability.
The airline reported a loss of 4.69 billion rupees (£58 million) in the three months to September against 2.31 billion rupees in the same period last year. Kingfisher chairman and managing director Vijay Mallya said the airline had “incurred substantial losses and its net worth has been eroded”.
But he added that the quarterly results had been prepared “on the basis that the company is a going concern”.
The airline, which has not made a profit since being established in May 2005, is talking to its banks about further credit facilities and is imposing rationalisation measures.
Creditors have already asked the company to raise $159 million in equity so that its debts can be restructured. Chief executive Sanjay Aggarwal issued a statement last week saying that the carrier was rationalising its network, dropping unprofitable flights and speeding up fleet reconfiguration.
“This initiative will improve the long term profitability of the airline,” he said. The number of daily flights has been cut by 40 to 300 and 100 pilots have left the airline.
He admitted that there has been “a few days delay for the last 2-3 months” in payment of salaries. “However, all employees have been paid in the month the salaries were due,” added Aggarwal.
“Kingfisher has not made any bail out request to the government. We have only asked our banks for an increase in limits due to significant increase in operating costs caused by increase in fuel prices and rupee devaluation,” he said.
“Kingfisher does not see any risk to its future or long term viability. The whole Indian aviation Industry is struggling due to high costs and lower yields. We are no exception. Like any other prudent business we are taking steps to improve our financial performance.”