Kingfisher shares fall to more than 4-month low after license-risk report
Kingfisher Airlines Ltd shares Tuesday fell nearly 12 percent to their lowest level in more than four months after a report said that the cash-strapped carrier risks losing its flying license.
Mumbai: Kingfisher Airlines Ltd shares Tuesday fell nearly 12 percent to their lowest level in more than four months after a report said that the cash-strapped carrier risks losing its flying license.
At early trade, the stock was down 5.0 percent at Rs 19.10, after falling to an intraday low of Rs 17.70, in a Bombay Stock Exchange market up 0.7 percent.
This is the stock's lowest level since it touched Rs 17.55 on Nov. 11.
The fall came a day after an agency cited an unnamed official source as saying that the Directorate General of Civil Aviation is considering whether to cancel Kingfisher's flying license.
This was sparked by the airline's submission of a new flight schedule reducing the number of planes it would operate to 15 or 16, compared with about 28 in February.
The report said also that the aviation regulator has asked Indian liquor baron Vijay Mallya, the airline's chief, for an explanation of Kingfisher's financial situation. A daily television channel reported separately Monday that the regulator had asked Mallya to meet Tuesday.
The report comes as the airline announced that two of its independent directors had resigned in less than a month.
An ill-timed expansion plan and high fuel and interest costs have pushed Kingfisher into heavy losses since its inception in 2005.
The airline owes millions of dollars to suppliers, lenders, aircraft-leasing companies and employees. Also, India's tax authorities froze Kingfisher's bank accounts last month after the airline defaulted on tax payments.
Over the past month, Kingfisher has cut its operations after being suspended from payment systems by global airline body International Air Transport Association and after several pilots stayed away from work protesting salary issues.
The company started reducing the number of flights it operates in November in a bid to cut costs.