Kingfisher Airlines share prices fall on MIAL's cash-and-carry directive

Kingfisher Airlines' shares fell over 5 per cent in morning trade on the Bombay Stock Exchange on Friday after Mumbai International Airport Ltd (MIAL) threatened to put the company on cash-and-carry mode from Saturday if it fails to pay up dues of around Rs 90 crore.

After a weak start, shares of the air-carrier lost further ground and fell by 5.66 per cent to Rs 22.50 on BSE.

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However, the stock saw some of the initial losses pared in later trade and was being quoted at Rs 23.15, down 2.94 per cent from its previous closing price, at 10.25 am.

After MIAL announced the new directive on Thursday, the cash-strapped airline went in damage-control mode, assuring its passengers that all its operations to and from Mumbai would continue uninterrupted.

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"We would like to reassure all our guests that all our flights will continue to operate, as per the revised schedule published on our website," the airline's vice president (corporate communications) Prakash Mirpuri said in a statement.

"As a matter of policy, we do not comment on supplier and partner relationships," Mirpuri added.

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The development of comes amid reports that state-run Airport Authority of India had also threatened to put the airline - which is sitting on a debt pile of over Rs 12,000 crore - on cash-and-carry mode.

The airline owes Rs 240 crore to the national airports operator and the move reportedly came after a cheque issued by Kingfisher bounced.

Airlines usually pay monthly charges to the airport operators. But under the cash-and-carry mode, Kingfisher - which operates most of its flights from the Mumbai and Delhi airports - will have to make daily payments.