Investors throng Kingfisher Airlines counter on cost cutting initiatives

Kingfisher Airlines jumped 17.62% at Rs 25.70 at 15:30 IST on BSE, extending Tuesday's 2.34% gain triggered by the company unveiling several cost cutting initiatives to help the firm limit losses.

Meanwhile, the BSE Sensex was down 163 points, or 0.97%, to 16,719.67.

On BSE, 66.95 lakh shares were traded in the counter as against an average daily volume of 10.13 lakh shares in the past one quarter.



The stock hit a high of Rs 26.05 and a low of Rs 21.50 so far during the day. The stock had hit a 52-week low of Rs 17.55 on 11 November 2011. The stock had hit a 52-week high of Rs 82.60 on 15 November 2010.

The stock had outperformed the market over the past one month until 15 November 2011, gaining 0.92% compared with the Sensex's 1.17% decline. The scrip had also underperformed the market in past one quarter, tumbling 24.26% as against 0.26% rise in the Sensex.

The mid-cap private air carrier has an equity capital of Rs 497.78 crore. Face value per share is Rs 10.

The Kingfisher Airlines stock rose 2.34% to Rs 21.85 on Tuesday, 15 November 2011, after the company announced several cost cutting initiatives during trading hours that day. The stock has risen 20.37% in the preceding two sessions from Rs 21.35 on Monday, 14 November 2011.

Kingfisher Airlines said that going forward the company retains its commitment to improve operations and maintain its prime standing with consumers. Kingfisher Airlines has initiated a large-scale aircraft reconfiguration and transition to the full service model, which would enable a greater number of seats in the air within the current costs and increase the choice of flights for its premium guests. Kingfisher said it is also undertaking several actions to further enhance profitability including network rationalisation, steps to reduce interest cost and a streamlining of existing fleet order.

Kingfisher Airlines reported net loss of Rs 468.67 crore in Q2 September 2011, higher than net loss of Rs 230.82 crore in Q2 September 2010. Fuel cost surged 70.21% to Rs 816.82 crore.

Net sales rose 10.52% to Rs 1528.16 crore in Q2 September 2011 over Q2 September 2010. in Q2 September 2011 over Q2 September 2010. The result was announced before trading hours on Tuesday, 15 November 2011.

The company said it was a challenging quarter for the aviation industry. The company said savings on interest and other costs were offset by a steep hike in fuel prices and the weakening of the Indian rupee, which negatively impacted 70% of its cost base.

Shares of Kingfisher Airlines had surged 8.65% to Rs 21.35 on Monday, 14 November 2011, on reports the company would consider proposals, including selling property, to cut its Rs 6500 crore debt to Rs 3000 crore. Reports had suggested that Kingfisher Airlines is also likely to propose a preferential issue of shares to investors, to meet a key demand of banks that are insisting its billionaire-founder Vijay Mallya to bring in more funds. The preferential issue of equity, if approved, will reportedly replace a rights issue of Rs 2000 crore approved by the board in August 2011.

Shares of Kingfisher plunged 17.61% in two sessions to Rs 19.65 on Friday, 11 November 2011 from a recent high of Rs 23.85 on 8 November 2011, after some media reports suggested that the airline was forced to cancel more than 120 flights last week as pilots and crew called in sick after their October 2011 salaries were delayed. However, in the same report, the airline said flights were canceled because it was reconfiguring planes. Another report said leasing companies had asked Kingfisher to return their planes after the company fell behind on payments.