Kingfisher Air hits record low on bleak revival chances

Moneycontrol Bureau

Kingfisher Airlines shares fell around 5 percent to a record low of Rs.6.9 on fears that the aviation regulator may not allow the carrier to restart operations.

The airline had submitted a revival plan to the Directorate General of Civil Aviation (DGCA) last week but it did not yield any results because officials found the plan inconclusive. Even its lenders are not satisfied with the plan it showed them recently.

After submitting the plan, Sanjay Aggarwal, the airline's CEO said that initial funding of Rs 650 crore will be infused by parent UB Group. He however did not divulge more details on when the airline will be able to resume flights.

Exclusive banking sources earlier told CNBC-TV18 that the plan is similar to previous plans submitted by chairman Vijay Mallya. The airline has stopped flying since October last year following a strike a section of employees over delay in salary payment. The airline has since then talking about roping in investors to raise funds but there is no development on this front.

The airline's flying license expired in December 2012, and the DGCA has refused to renew it due to the airline's inability to raise funds

It is extremely crucial for chairman Vijay Mallya to provide a concrete revival plan which will help him start operations. .

Saddled with over Rs 7,000 crore debt, the airline has stopped operations since mid 2012 after its employees protested against late payments. The airline has several times said that it is in talks with investors which will help it raise funds, but there has been no development on this front.

KFA had in January this year said that it will resume operations by March with seven aircraft and will later extend it to over 20. However, it has not been able to convince the regulator and also its lenders about how it will raise funds.

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