Kingfisher Airlines, owned by liquor baron Vijay Mallya, has widened its losses to Rs 483.2 crore (Rs 4.82 billion) for the quarter ended September 30, 2008, as against a net loss of Rs 253.1 crore (Rs 2.53 billion) for the corresponding quarter last year, a steep decline of 90 per cent.

Net sales for the quarter, however, have gone up by almost three times to Rs 1,322 crore (Rs 13.22 billion) thanks to the merged entity of Deccan Aviation [Get Quote] and Kingfisher Airlines.

Operating losses also increased nearly three times to Rs 620 crore (Rs 6.2 billion) as against Rs 266 crore (Rs 2.66 billion) for the corresponding previous quarter.  The airlines said in a statement that the aviation industry is going through a challenging phase globally, driven primarily by spiralling fuel costs, which hit an unprecedented $147 per barrel in July 2008.

"The Indian industry was hit more adversely due to the cumulative impact of customs duty and sales tax on account of the sharp increase in international fuel prices. The average price of aviation turbine fuel in the six-month period from April to September 2008 increased by about 60 per cent. The impact on Kingfisher Airlines alone was to the tune of Rs 640 crore (Rs 6.4 billion)," the statement said.

Kingfisher Airlines, which recently took a major step of aligning some of its operations with arch rival Jet Airways [Get Quote], said the industry was constrained to pass on at least a part of its cost in the form of fuel surcharge, resulting in an average 55 per cent increase in the ticket price.

"This increase in fares coupled with the lean season between June and September resulted in a drop in traffic and low-capacity utilisation for the industry as a whole. The period saw Kingfisher's seat factor dropping in line with the industry by about 6 per cent," the statement added.

The firm had returned two of its aircraft to leasors this year and said that it is in discussion for the return of eight more.

Kingfisher has also deferred its international rollout plans apart from one flight operating between Bangalore and London. "Consequent to this decision taken in the light of the global economic environment and the near-recession conditions prevalent in much of the Western world, there will be reduced deployment of wide-bodied aircraft," the statement added.