Kingfisher Airlines, Jet Airways break-even not before 2010: Experts

Mumbai: Even as Kingfisher Airlines and Jet Airways claim to having achieved a break-even in the current fiscal, audit firms, analysts and aviation industry trackers are skeptical about those claims. In a recent Annual General Meeting (AGM) of Kingfisher Airlines held in Bangalore, Vijay Mallya, Chairman, Kingfisher Airlines stated that Kingfisher Airlines is expecting to achieve operational breakeven this month. Also, Jet Airways is expecting a break-even by the end of this fiscal. According to a report in today’s Economic Times (ET), analysts think that break-even claims made by these airlines will, however, be difficult to be achieved.
Daljeet S Kohli, Research Head, Emkay Global Financial Services stated, “The crude and Aviation Turbine Fuel (ATF) prices have seen a drop though a back-of-the envelope calculation indicates that a break-even in the current fiscal will not be possible. It will take some more months for the airlines to emerge from the debts.” Some believe that the objective of making these claims on break-even is to attract funding in some form. Jet Airways reported its worst quarterly performance in over three years, incurring a net loss of Rs 384 crore in the September quarter. This was against a net profit of Rs 28 crore for the same period during the previous fiscal. The combined loss of Jet Airways and JetLite stood at nearly Rs 690 crore on March 31, 2008. Meanwhile Kingfisher Airlines reported a 90 per cent increase in its loss to Rs 483.2 crore this year. As a result both the airlines owe huge amounts- in excess of Rs 5,000 crore to the major oil companies, Airport Authority of India (AAI) and private airport operators. As National Aviation Company of India (NACIL), formed after the merger of Air India and Indian Airlines, is likely to incur a loss of Rs 2,156 crore in the current financial year. The government is examining a proposal for infusing additional equity into the company.
In all, the Indian carriers reported a cumulative loss of about Rs 4,000 crore in 2007-2008, which more than doubled to Rs 9,000 crore by the end of the current fiscal. Kingfisher Airlines and Jet Airways are also incurring losses due to declining passenger traffic.
29/12/08 TravelBizMonitor

To Read the News in full at Source, Click the Headline

Categories: Jet Airways Jan 2009, Kingfisher Jan 2009