Kingfisher Airlines has to infuse more funds to stay afloat: Auditor

MUMBAI: Auditors of debt-ridden Kingfisher Airlines have said that the company will have to infuse more funds if its wants to stay afloat, even as the carrier hoped that government would reduce ATF prices and taxes which will help it improve its finances.

The carrier's ability to meet its financial obligations depends on fresh infusion of funds, its auditors B K Ramadhyani & Co said.

Referring to a statement by Kingfisher that although its networth has eroded the financial results have been prepared on a "going concern basis", the auditors said, "The appropriateness of the said basis is inter alia dependent on the company's ability to infuse the requisite funds for meeting its obligations."

Kingfisher has reported a loss of Rs 468.66 crore in the quarter ended September 30, 2011, against Rs 230.81 crore in the same period last year. The company attributed the loss mainly to higher fuel prices.

The company, however, hoped that the government will reduce aviation turbine fuel prices and sales tax, which in turn would help the cash-strapped carrier improve finances.

"The reduction of prices of aviation fuel and reduction of sales tax on such fuel, which is under active consideration of the government with introduction of stringent cost reduction and control measures, will have positive impact on the working results of the company," the airline said while responding to the 'Limited Review' by its auditors.

It further said that in future, the airlines will have sufficient income to take care of deferred tax liabilities.

The airline was forced to cancel many flights because of mounting losses and has also sought help from banks to meet their short-term capital needs.

In the footnote to its financial results, Kingfisher had said that "having regard to improvement in the economic sentiment, rationalisation measures adopted by the company...the request made by the company to its bankers for further credit facilities..."

"...these interim financial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities."

Kingfisher had suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore.

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Aircraft Nano composites that Provide Early Warning System for Structural Failures

Nanotechnology is already having an impact on air travel, as evidenced by EasyJet’s testing of a nanocoating that will reduce wind drag and fuel consumption.

But if current research into new adhesives based on nanomaterials proves effective, the future of aircraft manufacturing could be altered significantly beyond just coatings and into the actual structures of the aircraft.

Researchers at the University of Toronto are looking into the use of multifunctional nanocomposites and adhesives that would be used in joining techniques for primary flight load structures and serve a double purpose of providing an early warning system for stresses on these structures and possible future failures.

This line of research builds on the already developing practice of using composites and adhesive bonding in the place of mechanical fastening or welding, such as with the new Airbus A380.

The University of Toronto researchers are working with carbon nanotubes to develop their multifunctional adhesives (smart adhesives) due to their electrical conductivity.

Earlier this year, I covered research coming out of MIT that would use carbon nanotubes in a method for detecting internal damage to composites.

In the MIT research, an electrical current would be applied to the composites that would heat up the carbon nanotubes and allow the use of thermographic camera for detecting flaws without the cumbersome need for heating the entire surface of the aircraft. 

The Canadian researchers are attempting something a bit more ambitious in that the method "employs a novel network recognition approach to determine current continuity and critical percolation level."

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