India's Kingfisher Airlines Reports 147% Increase In Losses

India's struggling private air carrier Kingfisher Airlines Saturday reported a 147 percent increase in its loss to 6.51 billion rupees for the quarter ending June 30, compared with a loss of 2.64 billion in the same period a year ago.

However, the loss declined 43.5 percent compared to the same in the previous quarter, after the company adopted a contingency plan to operate flights only in cost-effective routes. The operating loss increased 156 percent and finance cost increased 25 percent annually.

The airline, promoted by billionaire liquor baron Vijay Mallya, has been reporting losses since its inception in 2005.

Kingfisher Airlines, which once was the second biggest carrier in India, is struggling to stay afloat now, as the mounting debts and the strike by employees demanding their salary dues have affected its daily functioning.

The airline is facing liquidity crunch as its lenders, led by the State Bank of India, have refused to provide funds unless the promoters bring in fresh capital to the tune of 20 billion.

Though Mallya has been optimistic of raising funds from foreign markets, there has not been any sign of such a move by the foreign fund investors so far.

The airline has been frequently cancelling the flights following the strike by the employees demanding the salary arrears. Most of the employees have not been paid their dues since February.

Mallya reportedly said Thursday that he would stop funding the airline if the employees continued with their strike.

In another development, LKP Merchant Financing that held 16.48 percent share in the airline has brought down its holding to 5.58 by bulk sales in the market.