It looks like we have a victim of leverage, in Kingfisher Airlines (KFA)
Kingfisher, which is partly owned by brewery tycoon Vijay Mallya, has canceled more than 120 flights this week as pilots and crew called in sick after their October salaries were delayed.
The airline says flights were canceled because it was reconfiguring planes, the Press Trust of India reported. The Economic Times reported that leasing companies want Kingfisher to return their planes after the company fell behind on payments.
Kingfisher shares slid more than 12 percent on the Mumbai stock market Friday.
India’s airline industry has been hit by rising fuel costs and a crushing price war. Kingfisher is currently struggling under debt of $1.4 billion and shut down its budget carrier in September after it ran up losses.
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Kingfisher’s problems have worsened after three oil companies stopped giving it jet fuel on credit and asked the airline to make daily payments.
The airline has grounded eight of its leased turboprop ATR aircraft, and returned 14 leased A320 jets, leaving it with fewer aircraft in its fleet.
The stock’s at 19 and looking very bad, as it went below earlier lows of 18.85 earlier before it rebounded up. I’d be very careful buying this stock. But of course, it’s the age of bailouts….
