Kingfisher Airlines Working To Reduce Interest Costs

Kingfisher Airlines Working To Reduce Interest CostsKingfisher Airlines is working with a consortium of banks for further cutting down interest rates and raising working capital as the carrier looks to restructure its fleet by selling and leasing back some of its aircraft to lower debt, its chairman Vijay Mallya said.

In a speech at the airline’s annual shareholders’ meeting on Wednesday, Mallya said, “The high cost of ATF (aviation turbine fuel) coupled with a weakening rupee is the biggest challenge that the whole aviation industry in India is currently dealing with and we are no exception.”

From in.finance.yahoo.com:

Shares of Kingfisher Airlines have lost about 63 percent in value in a year, with the company suffering losses on high oil prices and intense domestic competition.

The airline’s auditors had said in the company’s annual report for the fiscal year that ended March 31, that it needs capital infusion to remain viable.

The auditors B.K. Ramadhyani & Co also noted, that the airline’s financial statements had “been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded.”

The airline continues to work aggressively to raise fresh capital, Mallya said, admitting it would not be an easy task.

Kingfisher Airlines also plans to convert part of its rupee loans into low-cost forex loans based on existing cash flows.

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