Kingfisher-Deccan means big losses too

Mumbai: The merger between Kingfisher Airlines and Deccan Aviation may have created one of the biggest airlines in India, but the new grouping is also among the biggest loss makers in terms of accumulated losses.
The combined accumulated loss of the merged entity totals about Rs 2,000 crore.
The figures for FY07 alone indicate that the combined entity would have a loss of Rs 993 crore.
The combined entity may have market share and fleet size but is financially on a weak wicket. The debt burden of the combined entity is over Rs 500 crore and is likely to rise further as it borrows more to buy new planes and maintain operations. Deccan’s net debt alone for the year ended June 2007 was Rs 350 crore.
The combined operations will need about $250-300 million over the next two quarters and we may look at private placement of shares, UB group chief financial officer Ravi Nedungadi said. The Kingfisher-Deccan combined revenue is likely to top Rs 3,500 crore for the year ending March 08 but that is little comfort for the company battling shrinking margins and stiff competition.
21/12/07 Economic Times

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Categories: Kingfisher Dec 2007, Simplifly Deccan Dec 2007