* Sept quarter net loss of 7.54 bln rupees vs 4.69 bln a
* Concerns mount over future, no concrete recovery plan
* Creditors set Nov. 30 deadline for fresh equity, investor
(Adds comments, background)
By Anurag Kotoky
NEW DELHI, Nov 8 India's debt-ridden Kingfisher
Airlines Ltd put on a brave face on Thursday after
announcing a record loss for the second quarter, saying a
recovery plan is in the works and its grounded jets will take to
the skies soon.
The airline, which has struggled to pay its staff for most
of the year and has not flown for over a month due to protests
and safety concerns, has never turned a profit in its eight-year
history. According to one estimate, it is saddled with roughly
$2.5 billion in debt.
The figures got even worse on Thursday for a company that
has been on life support for months.
Second-quarter results showed a loss of 7.54 billion rupees
($139.46 million), compared with a loss of 4.69 billion rupees a
year earlier. Revenue declined 87 percent to 2 billion rupees.
Despite the company's pledge on Thursday to produce a
comprehensive recovery plan, some analysts doubt that what was
once India's second-largest carrier will fly again.
Creditors have set a Nov. 30 deadline for Kingfisher to
bring in fresh equity or an investor, the chairman of State Bank
of India, its lead lender, told Reuters. He did not say
what would happen if the demand was not met.
"Options? It is already bankrupt, I don't think there is any
option," said a Mumbai-based aviation analyst with a local
"If a promoter can put in money, then possibly the company
can be revived, but we are talking about very large amounts of
money, 30-40 billion rupees," said the analyst, who did not wish
to be identified because he no longer covers the company.
A Kingfisher spokesman refused to comment.
Kingfisher has been scrambling without success to find fresh
investment. No global airline has publicly expressed an interest
in buying a stake.
The Centre for Asia Pacific Aviation has said a fully funded
turnaround for Kingfisher would cost at least $1 billion.
The carrier, controlled by liquor tycoon Vijay Mallya, said
on Thursday it was preparing a comprehensive plan to re-start
operations that would be shared with the airline regulator and
bankers. Kingfisher did not say when it would be available and
gave no details.
"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," it said in a
statement issued at around 1 a.m. local time.
This week, a top government official said India would not
renew the airline's licence if it failed to provide a turnaround
plan by the end of December.
Kingfisher's licence was suspended only after months of
cancelled flights, staff walkouts, unpaid bills and angry
creditors, prompting criticism that authorities were going easy
on the politically powerful Mallya, who is a member of
SBI chairman Pratip Chaudhuri said on Wednesday that
Kingfisher needs to raise or commit at least $1 billion by Nov.
30. It was not clear what action bankers would take if
Kingfisher misses that deadline.
Big state-run Indian banks often support companies in their
distress and liquidation is extremely rare. At several sessions
of a World Economic Forum summit this week in New Delhi, many
panellists questioned banks' high exposure to struggling firms.
"We are slightly disappointed with the pace at which their
capital-raising plan is going on. We have made it very clear to
the company that the company has no justification or no room for
debt. They have to give equity," Chaudhuri told reporters at the
event on Wednesday.
"We would like to see some tangible evidence, some forward
movement. Unfortunately till date, we have not seen anything
very significant," he said.
UK drinks giant Diageo Plc is in talks to pick up a
stake in Mallya's United Spirits Ltd and media reports
have said a deal could be announced as early as this week, which
could give the former billionaire some cash to put into
But Mallya, who is no longer a billionaire on the latest
Forbes list, told Reuters last month that he would not sell his
"family silver" to save Kingfisher.
A UB group spokesman declined to comment on Thursday.
Kingfisher shares have fallen around 40 percent this year
and were trading at 12.70 rupees on Thursday, a tiny fraction of
their all-time peak above 334 rupees in late 2007.
($1 = 54.0650 Indian rupees)
(Additional reporting by Aditi Shah in MUMBAI; Editing by