Kingfisher's loss doubles to Rs 489 crore

Kingfisher in the second quarter doubled its net loss to Rs 468.66 crore from Rs 230.81 crore in the same period, last financial. The company’s total income, however, has increased 11 per cent to Rs 1,528.16 crore in Q2 this year as against Rs 1,382.72 crore in
Q2 last year.

A 70 per cent jump in fuel cost to Rs 816.82 crore in Q2, 6.39 per cent rise in employee cost to Rs 183.21 crore and falling yield bloated Kingfisher’s losses. Fuel cost accounted for 52 per cent of the operational cost. With losses in Q2, the total accumulated loss of the company has mounted to Rs 6,081 crore, completely wiping out its net worth. “The company has incurred substantial losses and its networth has been eroded,” said a statement from the company.

Presenting the financial result, Kingfisher Managing Director Sanjay Agarwal said that the Indian domestic aviation industry is facing a challenging environment because just as the demand went up 22 per cent, supply of seats also went up by 20 per cent in the last six months. “As increased demand was matched with enhanced supply, there was no headroom to improve margins,” he said.  

Yes, the company is bleeding, but it did improve its operations in the Q2 this year. According to a presentation, Kingfisher had 4,414 million ASKM (available seat kilometre) in the Q2 as opposed to 3,757 in the same quarter last year, a jump of 17 per cent. Similarly, its RPKM (revenue passenger kilometre) in Q2 this year was 12 per cent higher and the company flew 30.10 lakh passengers in Q2 against 26.90 lakh.

But due to a steep increase in fuel price, the airline’s cost per ASKM went up 11 per cent to Rs 4.31 against 3.89 and the yield (denoted by gross revenue per passenger) went down by 2 per cent to Rs 4,531. Interestingly, though international operations contributed a small percentage of the total revenue, the yield at Rs 10,078 was up 11 per cent. In Mumbai, UB Group Chairman Vijay Mallya said that since Kingfisher flies to every nook and corner of the country and connects maximum number of destinations, it loses a lot from the heavily loss-making routes. But currently it is rationalising such routes, he said.