The financial agonies for Kingfisher Airlines (KFA) are seeming to become insurmountable. After being forced to massively scale down its operations and ground more than half of its fleet in the month of Feb 2012 when the IT-Dept froze its bank accounts over non-payment of tax dues, the estranged airliner has now cancelled all of its international operations and has the aviation regulator (DGCA) as well as the govt. breathing down its throat questioning the company’s ability to come up with a credible plan and revive the failing fortunes.
The cash-strapped airlines may need Rs 3000-4000 crore to get itself back on its feet. The airline is burning cash at a rapid rate and it is no ...view middle of the document...
All this is further putting pressure indirectly on the creditors to restructure the terms.
So dire are Kingfisher’s circumstances that it recently bounced a $3m cheque to the Airports Authority of India, to which it owes around $40m in fees. Recently state-run oil company Hindustan Petroleum, stopped fuel supplies to Kingfisher after the airline failed to pay a $26m bill.
India’s private airlines began the year optimistically, as soaring passenger numbers raised hopes that profits were finally on the horizon. But despite record numbers of passengers, the airlines are still in the red, as surging fuel prices and fierce price wars with ailing state carrier Air-India take their toll.
Banks are staring at a minimum of $1.20 billion (6,000 crore rupee) write-off on its loans to Kingfisher, making it the biggest write-off in Indian corporate history.
Flights were grounded by the Director General of Civil Aviation (DGCA) on Saturday. And the continuing delay in its flight services means even vulture funds are unlikely to invest in the airline.
Even hopes to resume operations look doubtful for who are going to fly the planes? Pilots have been in salary disputes all year with Kingfisher
While Vijay Mallya, chairman and promoter of the airline sounded confident and promised of a revival in operations it does not look possible considering the dismal situation they are in and with just 16 airplanes left to operate with, KFA might indeed be heading towards the dreadful chapter of filing for bankruptcy.