12 Nov 2011

More flights cancelled by debt-riddled airline

5:51 am on 12 November 2011

Kingfisher Airlines in India cancelled more flights on Friday as shares hit a record low amid continuing debt fears.

Thousands of passengers have been hit by hundreds of cancellations this week.

India's second-biggest airline is about $US1.2 billion in debt and struggling to raise cash.

Founder and part-owner Vijay Mallya insists the airline will not close, but is just cutting losses by rationalising flights and reconfiguring airlines.

The BBC reports shares in the carrier dropped 19.1% in early trading on the Bombay Stock Exchange, before recovering to close at a 9.45% loss.

On Friday, Civil Aviation Minister Vayalar Ravi told Indian TV channels he would talk to Finance Minister Pranab Mukherjee about possible financial assistance to Kingfisher.

Dozens of pilots have reportedly left the airline over the past few months, although Kingfisher says this was due to natural attrition.

The Economic Times has also said that companies which have leased planes to Kingfisher want them back as payments have fallen behind.