A few days back, the newspaper read that the Kingfisher Airlines may be rescued by Government of India. First, Corporate Affairs Minister, Veerapa Moily and then Minister for Aviation, Ajith Singh joined the Chorus . In Indian aviation industry , there is one white elephant , Air India, with accumulated losses and debt of about Rs 67000 crores. Kingfisher airlines , simply put owes about Rs 7000 crores to its lenders. According to the planning commission , the Aviation industry will be under debt of $ 20 Billion in 2011-2012. The Major factors being “many taxes” like those on fuel, aircraft leases, airport charges, air passenger tickets, air navigation service charges, maintenance costs, fuel throughput fees and other such charges. The major Culprit is ATF and the sales taxes imposed by the states,which vary from 16-30 %. Below is the data ,from Centre for Asia Pacific Aviation , which make the fate of the Indian aviation industry even murkier. Lately there has been debate in the print media. A comparison of Kingfisher and Satyam. And the conclusions have been logical ,saying they are two different episodes. And this shall also set a wrong precedent for future. And let the market force drive the industry. In US, recently , American Airlines , filed for chapter 11. I wish my father may also be minister for aviation and I may also take national carrier for ride. Mr. Kejriwal , stop asking questions about politicians flying around for elections campaigning /propaganda ( chunava prachar). Is someone naive ,here? An important question remains unanswered is, why kingfisher airlines be saved? Purely because Vijay Mallya , is King of good times and promises to share a bit of goodness with politicians . Are there any lessons to be learned by South West airlines , at all. Or hot air balloon is a promising and enthralling option. Pranab sir, more sleepless nights are waiting ahead for you. Recently ,interesting article was penned by Swaminathan S A Aiyar http://bit.ly/zuwtIf
ATF price in the four metros *Per Kilolitre
17 November 2011 Rs 62,310.33
16 November 2010 Rs 44,603
17 November 2011 Rs 70,465.19
16 November 2010 Rs 51,802
17 November 2011 Rs 63,228.40
16 November 2010 Rs 44,716
17 November 2011 Rs 67,018.04
16 November 2010 Rs 47,812
A billion-dollar horror story
Was the loss for the Indian carriers as on March 31st 2011.
Are the current fiscal losses (FY 11-12). This includes losses of about $ 1.75 to $2 billion for ai. For the rest of the carriers, the amount stands at $600-$700 million. Exception is Indigo which is expected to be profitable but operational profits will take a large hit in this fiscal. However, Indigo continues to deliver a robust performance in extremely challenging circumstances.
Is the amount Indian carriers need immediately. This includes ai requirement of $1.32 billion.
Indian banks have exposure of about $6 billion only related to working capital and term loans. They will have additional exposure on the aircraft related financing
Is the total debt burden of Indian carriers. This is an approximaate account. Largely on the balance sheet of three major carriers (Jet/Air India and Kingfisher Airline). This includes vendor related debt of $2 billion (approx)
Is the fund requirements of three listed airlines. Their current market cap is about $850 million.
Source: Centre for Asia Pacific Aviation