Slashes destinations by 22%, daily flights by 25%.
Kingfisher Airlines may have been trying to convince the public that not much has changed due to its ongoing financial restructuring, but the facts show otherwise.
The 2003-founded company’s network span has been pruned to 46 Indian destinations from the earlier 59 cities, which was the number a couple of months ago. As for its total flights, the number has been slashed to 260 from the earlier 350. Kingfisher is, however, managing to keep the international routes intact, but reports speak of possible cracks appearing, as its wide-bodied aircraft have begun getting grounded.
Senior officials at the UB Group, which owns Kingfisher Airlines, say they are trying to maneuver through the tough times and trying hard to get in the resources. The core team led by Vijay Mallya, chairman of the Bangalore-headquartered UB Group, with CFO Ravi Nedungadi and UB Holdings managing director Harish Bhat, are understood to be in wide-ranging discussions with lenders, private equity players and close associates of UB Group to come in with a contingent sum of around Rs 600 crore till the financial restructuring takes effect.
The beleaguered airline, according to a Reuters report quoting a company executive, has grounded 15 planes in its fleet, as it battles a prolonged cash crunch. The source did not say how long they had been grounded or why.
The company had, in an effort to bring in adequate resources to meet the huge interest burden of as much as Rs 1,300 crore on an annualised basis, indicated it would go for the full-service model. This would warrant grounding and reconfiguring of aircraft.
Kingfisher has maintained that the initiative would require it to keep three aircraft out of service at any time over as many months, so as to complete this exercise. “It will reduce the number of fleet configurations from seven to three, thus improve operational flexibility,” the company had claimed. “This initiative will add more seats to the fleet, improving revenue production of each aircraft.”
Analysts say such an exercise will cost Rs 150 crore for Kingfisher. This amount, they note, will be a stretch for the company under such trying circumstances. Sources further indicate that one such aircraft after being reconfigured is now being readied to be pressed back into service.
Last month, an aircraft lessor based in Netherlands took back a carrier after negotiations to reduce the lease rental by as much as 30 per cent failed to yield results for Kingfisher.
On Monday, the company’s stock managed to close steady at Rs 21.80 a share on the Bombay Stock Exchange, on a day when the benchmark Sensex dropped by 112 points.
