The Telegraph
Friday , November 9 , 2012
Since 1st March, 1999
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Kingfisher loss widens

New Delhi, Nov. 8: Kingfisher Airlines has suffered a net loss of Rs 753.55 crore in the quarter ended September against Rs 468.66 crore in the year-ago period, taking its accumulated losses to around Rs 9,000 crore. This is the 23rd straight quarter of loss for the beleaguered airline.

Meanwhile, the auditors of Kingfisher said the carrier’s second-quarter net loss would have been much higher, at about Rs 1,032 crore, had it followed “generally accepted accounting standards” for certain income and expenses.

Revenues plunged to Rs 200 crore from Rs 1,553 crore in the same period last year because of disruption in operations and eventual suspension of its licence by the Directorate-General of Civil Aviation. The airline has incurred a restructuring and idling cost of Rs 214.71 crore to maintain grounded planes.

In their limited review report, the auditors said the losses would have been higher if their “observations” about the company’s accounting procedures had been considered. Besides, its “reserves and surplus” would have been a debit of Rs 12,155 crore as on September 30 against a debit of Rs 7,339 crore reported by the company.

The auditors have drawn attention to Kingfisher’s financial statements being prepared on a “going concern” basis despite its net worth having been eroded.

According to the auditors, “the appropriateness of the said basis is inter-alia dependent on” the company’s ability to convince the DGCA to restore its scheduled air operator’s permit, infuse requisite funds for meeting its obligations, reschedule debt and resume normal operations.

However, the carrier put on a brave face and said it was working on a comprehensive plan to resume operations. “The airline is in discussion with various stakeholders to ensure that there are no future disruptions. Kingfisher Airlines expects to resume operations in the near future,” a statement said.

To add to the woes, the SBI — the largest lender to the cash-strapped carrier — has said it wants the Kingfisher promoters to infuse a minimum of $1 billion by November-end.

“We do not put a gun on their head, but the more comes in the better because airlines are a very capital-intensive business. I think about $1 billion will be a good starting point,” SBI chairman Pratip Chaudhuri said.