Indigo Airlines overtakes Kingfisher in October

Business

oi-Monika

By Monika Nihalani

Published: Saturday, November 19, 2011, 14:39 [IST]

Kingfisher Airlines, which is in trouble from all fronts from past few weeks lost its second position in terms of market share in October. The place has been overtook by budget airline, Indigo Airlines, government data showed.

The first position is occupied by Jet plus JetLite with the market share of 24.8% during the month of October, followed by Indigo Airlines with 19.6%, while Kingfisher's market share stood at 16.7%.

The recent troubles of flight cancellations, pilots quitting, aircrafts grounded may affect the growth of Kingfisher further in the months of November and December.

Balance sheets of all the major airlines of India flooded with losses during the second quarter of 2012 barring Indigo due to rising fuel expenditure.

On the other side, the cash-strapped airlines' chairman Dr. Vijay Mallya have consulted the chairman of India's largest lender, State Bank of India to borrow Rs 400 crore to meet daily expenditure, as reported by Economic Times.

The State Bank of India has empowered its own Merchant Banking division, SBI caps to study the viability of Kingfisher's business model.

Banks who have lent more than Rs 7,000 crore to the company, want the company to infuse more equity before they lend more.

Kingfisher is also planning to launch rights issue and global depository receipts (GDRs), which could face hindrance due to prevailing volatility in the market.

The Centre for Asia Pacific Aviation (CAPA) has forecast a record $ 2.5 billion to $ 3 billion loss for Indian airlines for the year ending March 2012, with the major pie is shared by state-run Air India.