In a bid to improve its financial position, Kingfisher Airlines (KFA) has decided to exit the low cost Kingfisher Red business. Chairman Vijay Mallya said, margins and yields are better in KFA Class versus KFA Red.
He also said the company’s shareholders have approved Rs 2,000 crore rights issue.
Kingfisher has been working and continues to work aggressively to raise fresh capital. The airline is in dire need to improve its financial position as it has never reported profits since its inception in 2006 due to which strategic investors have been shying away from investing in the airline.
The April-June quarter was also no different when the airline reported losses of Rs 264 crore as against 187 crore Y-o-Y.
The airline with a market share of 19% in January this year has partially re-structured its loans to bring down the interest cost. Currently, its debt stands at around Rs 6,000 crore.
The high cost of aviation turbine fuel (ATF) coupled with a weakening rupee is the biggest challenge that the whole aviation industry in India is currently dealing with.
According to Mallya, airfare will go up further, if oil prices rise.
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