Kingfisher down 5% after Mumbai airport scraps credit line

Shares of Kingfisher Airlines slipped 5% to 22.80 on news that the carrier has been put on cash-and-carry basis by Mumbai International Airport Ltd (MIAL).

Hence, from tomorrow, the airline will have to start clearing the dues it owes to the Mumbai airport operator if it wants to continue landing and parking its aircraft here.

Kingfisher will now have to pay Rs 60 lakh each day towards parking and landing fee and other airport infrastructure. The airline operates around 42 flights from the Mumbai airport.

The Vijay Mallya-led airline has lost the privilege of enjoying a credit cycle of one month like other airlines, as it has several times defaulted on its payments to the airport operator.

However, the stock has recovered from its life time low of Rs 17.55 which it touched on November 11 after the carrier announced that its net loss more than doubled to Rs 468.66 crore in the September quarter year-on-year. Analysts believe fears of bankruptcy may have affected the sentiment in the stock.

But since then, the stock has recovered 4.4% to its current levels on hopes that the debt-ridden company will re-align its business model for the good.

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