Kingfisher Airlines: Facing Turbulence
2/23/2012 9:30 PM Thursday
The debt-ridden Kingfisher Airlines (KFA) has run into fresh controversy yet again, as it had to ground more than half of its fleet on Monday, 20th February, 2012. The company blamed the Income Tax Department’s move of freezing its bank accounts over non-payment of tax dues for the cancellation of its operations. Consequently, the Chief Executive Officer (CEO), Sanjay Aggarwal, was summoned by the Director General of Civil Aviation (DGCA), who directed the company to submit concrete flight schedules within 24 hours and put an end to the passengers’ misery.
In reply to the DGCA, the estranged airliner has submitted a revised flight schedule plan, announcing a sharp drop in operations from 64 flights to just 28 flights. Also, SBI, which is one of KFA’s lenders, has refused to comment on media reports that suggested that the airline was to receive fund infusion from SBI towards bank guarantees and working capital sanctions.
For long, the beleaguered airliner’s shares have massively underperformed on the bourses and they have lost more than 60 per cent of their value over the past two years, bleeding investors of their hard-earned money. In the aftermath of yet another quarter of widening net losses, investors would be wondering what to do with the scrip now. Some would ponder over the idea of bottom fishing into this stock and back their call with the possibility of capital infusion by the company’s bankers, FDI in the aviation sector and the government’s plan to allow the direct import of jet fuel.
Our advice, however, is a clear ‘STAY AWAY’. Despite all efforts taken by the government, bankers or the company itself, it’s time one starts counting the clock over when the curtains would fall and put an end to KFA’s fate.
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