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Wendy is an IFE Agent responsible for aggregating airline news specifically related to Inflight entertainment. She compiles stories relevant to business travelers, airline industry folks, marketers and tech geeks. IFE News doesn't create original content, but rather posts compelling editorial from global media outlets.

Kingfisher Airlines Runs Into Payroll Snag

Kingfisher Airlines Runs Into Payroll Snag

The company is a classic example of why many investors hate anything that flies. In the U.S., the Dow Jones Airlines Index is down 7.08% over the last 12 months and down 51.88% over the last five years.  Kingfisher Airlines’ stock on India’s National Stock Exchange is down 59% over the last 12 months and 83.68% over the last five years.  Airlines continue to struggle with volatile-to-high jet fuel costs and other overhead expenses, while trying to keep coach travel affordable.

In February, Kingfisher reported a 75% increase in its losses to 4.44 billion rupees, or $90 million, between October and December 2011, compared with 2.54 billion lost rupees a year before. The company has failed to make a profit since it launched in 2005.  It has $1.3 billion in debt overhang that many analysts suggest will eventually ground the airline completely, turning its dwindling market share (now No. 3 with 6.4% market share) over to the new top 2– Jet Airways and IndiGo. Kingfisher Airlines had a market share of 19% in 2011.

The biggest gainer from the Kingfisher crisis has been Jet Airways and its low-cost, no frills subsidiary JetLite. They had a market share of 29.2% in March, making it the No. 1 airline in India.  IndiGo comes in second with a market share of 21.9%.  Both now have more than 50% share of the domestic flight market. But even Jet Airways has struggled on the Bombay Stock Exchange in Mumbai.  There share price is down 27.14% in the last 12 months and 48.83% over the last five years, underperforming the Indian stock exchange — which has produced negative results itself over the last 12 months and five year stretches.

Still, this might not be a business a proud billionaire like Mallya wants to see slip by him.  Billionaires own airlines and sports teams.  And the fundamentals are positive for Indian air travel.  Indians are slowly getting richer and they are flying more. Last year, 15.3 million Indians took to the skies compared to 14.3 million in 2010, according to industry figures published Friday by The Hindustan Times in India.

– Forbes contributor, Kenneth Rapoza

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