Kingfisher sticks it out in spite of huge debts
26 Jul 2008
Bangalore: Officials of UB Group-owned Kingfisher Airlines have confirmed that the airline has indeed run up debts of Rs4,000 crore. Though the airline, now merged with Deccan Aviation, earns total revenues of around Rs3,000 crore, it is expected to incur losses of Rs900 crore on an annual basis.
This amount is expected to be in addition to losses of around Rs650 crore incurred by Deccan Aviation.
Along with other airlines, Kingfisher too is suffering the effects of a industry-wide downturn sparked off by rising costs of fuel and slumping passenger demand.
Unlike other airlines, however, which are deferring deliveries, Kingfisher took delivery of a new Airbus aircraft (A330-200). The wide-body is expected to be deployed on international routes, once these services commence in September.
Confirming that the Bangalore-based carrier has raised a total debt of Rs4,000 crore, officials said that plans had been chalked out to raise $250-million through the equity route around the time Deccan Aviation taken over. Adverse market conditions, however, forced valuations down and the equity route was given the go-by and further debt was raised consequently.
