Indian airline cancels hundreds of flights as it struggles to pay bills
Uncertainty about the future of Kingfisher Airlines, India’s second-biggest airline, continues to grow. It has reported that its ballooning losses doubled between July and September, year-on-year, to reach 4.69 billion rupees (€68 million). Recent cash-flow problems have forced Kingfisher, which is due to join the oneworld alliance in 2012, to abruptly cancel hundreds of flights. However, it is possible that the Indian state may assume that the airline is ‘too big to fail’ and formulate a bailout package.
The carrier began operations in 2005 as the Indian economy boomed. But it has since incurred debts of around €1.4 billion. The airline’s budget carrier, Kingfisher Red, closed in September. Creditors want Kingfisher to quickly raise equity so its debts can be restructured. Its biggest lender, the State Bank of India, is demanding a credible business plan.
[pictured: Kingfisher airlines, taxing in Bangalore Airport, India; photo by Marirs]