Commercial Finance Specialists

Struggling Indian airline Kingfisher has fallen into deeper crisis as it cancelled more flights on Friday and saw shares plummet.

Kingfisher claimed to be cancelling 50 flights per day this week as it attempted to restructure its schedule and reconfigure its planes for efficiency savings. But Thursday saw 149 flights cancelled, 36% of the schedule.

It is now seeking government help in a desperate attempt to raise funds. Kingfisher owner Vijay Mallya has appealed for the kinds of concessions that Air India was receiving.

The airline is suggested to be $1.2 billion in debt, struggling to raise further commercial finance, and last week announced that it would have to termination a number of pilots' contracts. Over 100 pilots have either been released or quit in recent weeks.

India's aviation regulator has now started financial surveillance of airlines to ensure that the financial difficulties were not leading to any concessions of safety.

With a lack of asset finance, Kingfisher faces the prospect of having to return planes to the unpaid aircraft leasing companies. Companies such as Investec Global Aircraft Leasing, which negotiated with Airbus on Kingfisher's behalf, are now in talks over repossession.

With the firm fast running out of cash and with debts swelling daily, shares in the carrier dropped almost 20% on the Bombay Stock Exchange before making a modest recovery.