Mumbai: Kingfisher Airlines Ltd, the Indian carrier that cut flights amid a cash shortage, fell the most in more than a week in Mumbai after a government official said the aviation ministry is scrutinising its finances.
The company's shares dropped 1.1 per cent, the most since November 18, to Rs26.80 (Dh1.85) Jet Airways (India) Ltd. and SpiceJet Ltd also declined.
All three stocks have plunged at least 60 per cent this year.
Kingfisher stopped flying 12 of its 27 ATR planes, prompting authorities to consider taking back some airport slots, the official said on Friday, declining to be identified because of department rules.
Chiefs of Indian carriers met Prime Minister Manmohan Singh the next day as they sought assistance to stem industry losses caused by fuel costs and a price war.
"It's not a hidden thing that the company is fighting very hard to raise capital," said Sharan Lillaney, an analyst at Angel Broking Ltd in Mumbai.
"Doing an audit will not give you any other result."
The ministry is reviewing Kingfisher's accounts to determine whether the airline has the financial strength to pay for spares and aircraft services, the official said. The carrier, based in Bengaluru, has pared daily services to 300 from 340 and is seeking new loans after losses widened.
Prakash Mirpuri, a spokesman for Kingfisher, didn't respond to emailed questions.
The carrier is returning two planes it leased from AerCap Holdings NV after the company "could not agree on mutually acceptable extension terms," he said in a statement Thursday.
Fuel knock-on effect
Kingfisher as well as Jet Airways, the nation's largest carrier, and SpiceJet, India's only listed low-cost airline, owed money to state-owned fuel suppliers in the quarter ended September 30, oil minister S. Jaipal Reddy told parliament on Thursday.
Private airlines have blamed fuel costs and low fares for their troubles.
The price of jet fuel, the biggest expense for carriers, increased about 31 per cent this year in Mumbai, according to Indian Oil Corporation's website.
Taxes on the fuel average about 25 per cent.
Kingfisher also defaulted on payments to airports and is paying cash every day to use the facilities, a civil aviation ministry official, who refused to be identified, said last week.
