Kingfisher Airlines and both need infusions of capital if they are to stay afloat, according to their respective auditors.
B. K. Ramadhyani & Co., which audits debt-ridden Kingfisher Airlines, says, the carrier’s ability to meet its financial obligations is “dependent on the company’s ability to infuse the requisite funds.”
Kingfisher reported a loss of 4.69 billion rupees ($89.3 million) in the quarter ended Sept. 30, 2011, compared with 2.31 billion rupees in the same period last year, mainly because of higher fuel prices.
Similarly, auditor Deloitte Haskins & Sells and Chaturvedi & Shah, says that raising funds is important if Jet Airways’ accounts are to be prepared on a “going concern” basis in the future.
Jet Airways, India’s largest airline as measured by market share, posted its second straight quarterly net loss of 7.14 billion rupees ($136 million) in the July-September period, compared with a net profit of 124 million rupees a year earlier.
These cash-strapped airlines are hoping that the government will reduce jet fuel prices and sales tax to help them through the crisis.
“The reduction of prices of aviation fuel and reduction of sales tax on such fuel, which is under active consideration of the government with introduction of stringent cost reduction and control measures, will have positive impact on the working results of the company,” Jet Airways said.
Flag carrieralso reeling under heavy losses and has received repeated financial assistance from the government.
Currently, a panel of ministers is outlining a turnaround plan to revive the carrier. The ministerial panel is looking at injecting 30 billion rupees into the national carrier over the next 10 years, of which 66 billion rupees could be invested in the current fiscal year, which ends March 31.