Kingfisher faces prospects of operational shutdown without cash injection: CAPA India

Kingfisher Airlines faces the prospect of an operational shutdown, possibly temporarily, to allow it to restructure and reorganise, if it does not receive an investment of approximately USD600 million in the next 30-60 days, according to a CAPA India report on the Indian carrier's 1QFY2013 performance, released on 24-Aug-2012. The carrier also needs access to a further USD400 million over the next 12-18 months to fully-fund its business plan. The carrier, who reported a loss in line with expectations in 1Q, continues to operate with minimal cashflows, its services are subject to occasional disruption due to labour issues arising from delays in the payment of salaries. The CAPA India report continued, "Operating a 'holding schedule' with just a fraction of the fleet means that it is almost impossible to generate the necessary revenue (which totalled only INR3 billion/USD53.6 million in 1QFY2013 for example) to meet the huge fixed costs and interest burden on its debt. Kingfisher is able to continue as a result of daily infusions of funding by the promoter, however, with mounting losses the situation is unsustainable. In 1Q the promoters invested USD133.9 million, but this barely allows the airline to survive." [more - CAPA Analysis]