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Kingfisher Airlines reports an overall EBITDA profit of Rs. 55 Crores for Q2 FY 11. EBITDAR margin at 20% and EBITDA margin at 4%


Abu Dhabi, November 14, 2010 - The profits for the quarter would have been higher by Rs. 73 Crores but for the cost incurred on account of unplanned grounding of aircraft.

Kingfisher Airlines reported a significant improvement in its operating performance, driven by:
1) the growth in aviation demand;
2) focus on improving network profitability; and
3) various cost reduction initiatives.

Despite an 11% reduction in the number of departures, Kingfisher posted a 24% improvement in Operating Revenues. The overall EBITDA margin for the quarter improved to a positive 4% from the negative 24% reported in the same quarter last year. These results have been delivered despite an estimated loss of over Rs. 73 Crores due to unplanned grounding of aircraft. Adjusted for this loss, the EBITDA margin would be 8% for the quarter.

With all of the grounded aircraft returning to service progressively and planned addition of incremental capacity, Kingfisher will continue to maintain and further build upon its market leadership position.

The domestic operations posted an EBITDA of Rs. 108 Crores for the quarter, an improvement of Rs. 255 Crores over the same quarter last year. Domestic EBITDA margin was 9.2%. The quarterly loss for international operations reduced to Rs. 53 Crores, a year-over-year improvement of Rs. 81 Crores. International EBITDA margin is negative at 15%.

For the six months ended September 2010, Domestic EBITDA margin is positive at 11% vs. negative at 3% last year. International EBITDA margin is negative at 16% vs. negative at 137% for the same six months last year.

Q2 FY11 Performance
• On an overall basis, the Company has made an EBITDA profit of Rs. 55 Crores in Q2 FY 11 vs. a loss of Rs. 281 Crores during the same period of the previous year an improvement of Rs. 336 Crores
• The Company posted a positive 20% EBITDAR margin of Rs. 308 Crores as against a loss of Rs. 0.8 Crore in the corresponding quarter of the previous financial year- an improvement of Rs. 309 Crores
• EBITDA profit of Rs. 108 Crores (despite accounting for Rs. 73 Crores of costs in respect of grounded aircraft) for its domestic operations, compared to a loss of Rs. 147 Crores in the same period of the previous year - an improvement of Rs. 255 Crores. The domestic EBITDA margin also improved from -13.98% to +9.21%
• This performance was despite a 18% reduction in domestic capacity in terms of seats offered, due to the unplanned grounding of Airbus aircraft.
• Kingfisher Airlines continues to remain “India’s favorite airline” and the only five star rated airline in India (as per Skytrax) and the single largest carrier in the domestic industry with a market share of 20% in Q2 FY 2011.

H1 FY11 Performance
• On an overall basis, the Company has incurred an EBITDA profit of Rs. 181 Crores in H1 FY 11 vs. a loss of Rs. 353 Crores during the same period of the previous year – an improvement of Rs. 534 Crores
• The Company posted a positive 21% EBITDAR margin of Rs. 673 Crores as against a profit of Rs. 226 Crores in the corresponding quarter of the previous financial year- an improvement of Rs. 447 Crores • EBITDA profit of Rs 285 Crores (despite accounting for Rs. 108 Crores costs of grounded aircraft) for its domestic operations, compared to a loss of Rs. 72 Crores in the same period of the previous year - an improvement of Rs. 357 Crores. The domestic EBITDA margin also improved from -3.03% to +11.2%
• This performance was despite a 18% reduction in domestic capacity in terms of seats offered

A detailed presentation is attached to this note.

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