Kingfisher Airlines shares fall 5% for 8th straight session

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Shares in Kingfisher Airlines were locked on the lower circuit for the eight straight session Wednesday. At 10 a.m., the stock was down 5 per cent at Rs. 11.40 on the NSE. Debt-strapped Kingfisher stopped flights on October 1 after a weekend protest by staff turned violent and has extended what it described as a partial lock-out to October 12.

The stock has plunged 33 per cent over the last eight sessions after closing at a high of Rs. 16.95 on September 27. Last month, the BSE had halved its circuit limits on shares of Kingfisher Airlines, capping the maximum movement in a day at 5 per cent following a sharp rally in the share prices of Kingfisher Airlines.

On Tuesday, aviation regulator Directorate General of Civil Aviation had asked Kingfisher Airlines, which faces a possible shutdown by the government after an extended grounding of its fleet, to stop selling tickets until its concerns are resolved, a government source said.

The DGCA told the airline last week to demonstrate why its permit to fly should not be suspended or cancelled, saying the airline had failed to establish a "safe, efficient and reliable service".

Kingfisher Airlines CEO Sanjay Aggarwal has written a fresh letter to the airline's employees, asking them to join back work. Mr Aggarwal said if the employees don't report for work there will be "no way forward" for the airline.

Though the letter does not mention anything about the salaries that the staff has not been paid for months, it says the company will be able to present a viable plan to aviation regulator DGCA, that will allow it to resume operations from October 13, only if the staff gets back to work.

Kingfisher, once India's second-biggest airline, has failed to find an overseas airline or other investors to bring in fresh equity. It is now the smallest of India's six main carriers and its steep decline has enabled rivals such as Jet Airways and IndiGo to raise fares in what had been a ferociously competitive market plagued by overcapacity.

Kingfisher, controlled by liquor baron Vijay Mallya, has never turned a profit since its launch in 2005 and before this week was flying only 10 planes. Its fleet once numbered 64.

Kingfisher's lenders, mostly government banks led by State Bank of India, have refused to extend further credit in the absence of fresh equity, but they have shown patience. Indian state banks rarely force big companies to liquidate.

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