Kingfisher, controlled by Vijay Mallya, continues to struggle in view of high airport charges, high state taxes on jet fuel, an uncertain regulatory environment, and fares falling below the costs. Kingfisher, which used to be India’s second biggest carrier, has never made profit since 2005. Kingfisher net profit results showed that the carrier has suffered a loss of 6.51 billion rupees in quarter ending June in comparison to loss of 2.64 billion rupees in the last year.
Kingfisher Airlines Ltd NSE shares closed at INR7.40/- quite close to its 52 week low of INR7.20/-
According to Center for Asia Pacific Aviation Consultancy, Kingfisher needs at least $500 million for uninterrupted operations. Kingfisher has not received any stakes from any foreign airline. The rising state taxes up to 30% have made the jet fuel costlier in India as compared to other countries.
Cancellation of flights due to non-payment of salaries of pilots or crew have added to the woes of the company. Kingfisher’s woes have worked no less than a boon for other players in the market, namely Jet Airways and SpiceJet, which have reported a surprise rise in quarterly profits.