It seems the torrid time that Kingfisher Airlines is having is just getting worse.
Kingfisher is considering proposals to cut it’s debt pile by 50% – from $1.3 Billion. This involves:
- Selling off property
- Disposal of assets
- Modifying loans from the parent company (Kingfisher Group)
- Changing leasing terms on it’s aircraft.
- Cutting non-income making routes and rationalising routes
But before much can happen, Kingfisher’s creditors have requested that $159 million of equity need to be raised.
The State Bank of India also states going forward, it must have a creditable business plan before restructuring.
Kingfishers problems are multi-fold. Whilst not completely free of the bureaucracy that Air India suffers (and suffered to it’s major loss when Air India stuffed up it’s Star Alliance membership), the attack of the low-cost carriers (Indigo) and from the looks of it – poor fuel price hedging have contributed to it’s current woes.
The fact also it hasn’t cut a profit since it’s formation in 2005 also says a fair bit.
Whilst I don’t see a full crash and burn scenario coming for Kingfisher, I do see some hard rationalisation coming up. How it will affect it’s entry into OneWorld will be a completely different matter.
it’s = it is. its is the possessive.