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Kingfisher Loss Widens As Revenue Plummets

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Debt-ridden Kingfisher Airlines, grounded for over a month after a violent staff protest and concerns about safety, widened its quarterly loss from a year ago because of a steep decline in revenues.
 
The company said it is preparing a comprehensive plan to restart operations soon. The airline posted a record net loss of Rs 754 crore for the September quarter, compared with a loss of Rs 469 crore a year earlier.
 
Revenues declined 87 per cent to Rs 200 crore from Rs 1,550 crore a year ago.
 
Kingfisher is preparing a comprehensive plan for re-start of operations which will be shared with the airline regulator and bankers, the carrier said in a statement.
 
Some analysts doubt Kingfisher will fly again and the company's failure to produce a concrete recovery plan underlined concerns about its viability. Local media had reported that Kingfisher may present a rescue plan this week.
 
Creditors have set a 30 November deadline for it 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.
 
"It looks very difficult," said a Mumbai-based equity analyst who did not wish to be identified because he does not cover the company anymore. "They have like 20 days to raise a billion dollars. I don't know how they can do that in 20 days, they haven't managed to do that in a year."
 
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.
 
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.
 
SBI chairman Pratip Chaudhuri said on 7 November Kingfisher needs to raise or commit at least $1 billion by 30 November, although lenders are not looking to liquidate the carrier's assets as of now.
 
"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. "We would like to see some tangible evidence, some forward movement. Unfortunately till date, we have not seen anything very significant," he said.
 
Kingfisher shares are down 39 per cent this year, closing at Rs 12.8 before the earnings release, a tiny fraction of their all-time peak above Rs 334 in late 2007.
 
(Reuters)