The carrier is expected to seek between Rs250-300crore as working capital from the banks to continue operations.
Kingfisher Airlines would hold a important meeting with its consortium of lenders on Saturday. The carrier is expected to seek between Rs250-300crore as working capital from the banks to continue operations. This meeting is also expected to discuss the future course of debt repayment, said a senior official with a leading public sector bank.
“There has been no proposal for a second debt recast. We are more concerned about the 134 flights being cancelled by the company than the debt issue. The meeting will focus on the repayment methods and the future course of the company,” the banker said. The official also hinted that the members of the consortium will ask chairman Vijay Mallya to sell off some of his securities and other assets for repayment.
Meanwhile, the airline has told the DGCA that it will withdraw 30 aircraft from operations for reconfiguring over the next four months. Though it has assured the regulator that not over 3 aircraft would be withdrawn at any given time, the DGCA is sceptical and flight disruptions across the Kingfisher network may well stretch beyond the 19th of the month, into the peak winter schedule.
Some 50 pilots and cabin crew did not turn up for duty across the Kingfisher network today as over 40 flights were cancelled.
Prominent travel agents have already stopped taking bookings for the airline, pushing up domestic fares by 20-40%. Kingfisher has the largest share of the aviation pie so mass scale flight disruptions are bound to affect fares.
Kingfisher posted losses totalling about Rs4700 crore over the last three years as it added new planes and competed in a tough market. Earlier this year, it won as much as Rs1210 crore of new loans after banks agreed to convert Rs 1300 crore of existing debt into preferred shares.
Not only has its mass scale flight cancellation attracted a show cause notice from DGCA, it is now also accused of not operating a third of the scheduled flights it had promised for the winter schedule (which began on the first of this month). DGCA director general EK Bharatbhushan said the slots at airports that Kingfisher isn’t using will be given to other carriers. According to Kingfisher’s annual report, promoter Vijay Mallya had doubled personal guarantees against the carrier’s debt to Rs6,170 crore in the year ended March.
Some analysts tracking Kingfisher now feel that Mallya should consider the option of filing for bankruptcy. “If Kingfisher files for bankruptcy, it would be a very positive move for the airline,” said Sharan Lillaney of Angel Broking.
India’s private sector airlines have been hit by fuel prices and a severe price war waged by the state run Air-India, despite the overall number of passengers in the first nine months of 2011 rising 18.6 % year on year.
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