Beleaguered Kingfisher Airlines has grounded 15 planes in its fleet as it battles a prolonged cash crunch, a company executive said, as banks continue efforts to prop up the airline, which until recently was India’s second-largest.
A Kingfisher executive, who declined to be identified, told reporters the airline had grounded 15 of its planes but did not say how long they had been grounded or why.
The executive was speaking after the Economic Times reported that Kingfisher had grounded planes after it was unable to meet maintenance and overhaul expenses.
Kingfisher, controlled by flamboyant drinks tycoon Vijay Mallya, has been seeking additional working capital from its lenders.
“We are trying to help Kingfisher,” State Bank of India chairman Pratip Choudhuri told reporters on Monday morning.
Asked if banks were open to lending more funds to the cash-starved airline, he said, “Everything is on the table”.
Indian conglomerate Sahara, meanwhile, plans to lend Kingfisher more than INR2.5 billion rupees (USD$47.4 million), the Times of India reported, citing sources.
A Sahara source who declined to be identified said on Monday that the group was planning to lend to the carrier at least that amount but did not give further details.
A Sahara spokesman declined to comment.
Kingfisher’s share price has fallen 67 percent since the start of the year, cutting its market value to about USD$202 million.
All but one of India’s six main airlines is loss making, as carriers engage in aggressive price competition even as they are squeezed by the high cost of jet fuel and other expenses.
India’s aviation regulator is conducting a financial review of Kingfisher, a process that is ongoing, an official with the regulator said on Monday, declining to be identified.
Kingfisher’s active fleet has shrunk to 40 from 69 at the end of 2010, the Economic Times report said.
A Kingfisher spokesman declined to comment.
An official source at Mumbai airport told reporters that Kingfisher had grounded two aircraft there in recent weeks due to a lack of spare parts, but there were no new flight cancellations.
Kingfisher, which has never made a profit, has seen its market share shrink to third-place after it cut flights from last month. Over 100 of its pilots have quit recently and suppliers, including airports and oil companies, have stopped extending credit to the airline.
Separately, Kingfisher said it would become part of the global oneworld alliance from February, making it the first carrier from the subcontinent to join a global airline group.
“For Kingfisher Airlines, joining oneworld will strengthen its competitive offering and its financial position,” it said in a statement, adding it would add more than 40 destinations to the alliance’s network, all of them in India.