Kingfisher Air Q3 loss widens, fuel costs mount

By Henry Foy

MUMBAI (Reuters) - Kingfisher Airlines' losses mounted in the third quarter, taking the total loss to $240 million this fiscal year, as the ailing Indian carrier was squeezed by high fuel costs, a weaker rupee and fierce competition.

Cash-strapped Kingfisher, controlled by liquor baron Vijay Mallya, has become a byword for the debt-laden Indian airline industry savaged by rising fuel bills, dwindling cash and a stark lack of financing options.

"The company has incurred substantial losses and its networth has been eroded," Kingfisher said in a statement.

"Steep depreciation of the Indian rupee coupled with consistently high crude oil prices has led to a challenging quarter for the Indian aviation industry," the company added.

The company is around a quarter-owned by banks and its top lender State Bank of India has refused to add to loans it considers non-performing.

Kingfisher is in talks with distressed-debt experts but there are no signs of a guardian angel equity injection that executives have long promised. An entry into the potentially lucrative oneworld alliance was postponed this month as it scrambles for capital.

Unpaid staff have left in droves, and scores of flights have been cancelled to cut costs. Turboprop maker ATR, a joint venture of EADS and Finmeccanica (:SIFI.MISIFI.MI), cancelled 38 plane orders from Kingfisher in January because the airline hadn't paid for the planes.

"Right now this is just minor fire-fighting, at some point they will need to consider a wholesale scale-back, such as a possible dumping of the international services," an airline sector analyst at a Mumbai brokerage told Reuters.

Kingfisher's parent chief financial officer, Ravi Nedungadi, declined to comment on the results when contacted by Reuters.

Kingfisher, named after India's most famous beer owned by its parent company, lost 4.44 billion rupees in the fiscal third quarter that ended in December, 74.8 percent more than a loss of 2.54 billion rupees a year previously.

The company has lost 11.8 billion rupees in the first nine months of the current fiscal year that ends in March, a 35 percent rise from a year earlier.

Revenue in the third quarter fell 15.2 percent to 13.42 billion rupees.

TROUBLED SKIES

India's airlines are likely to lose up to $3 billion in the fiscal year ending March as the industry's total debt swells to $20 billion. Five of India's top six airlines are loss-making, including state-owned Air India which is operating on taxpayer life support.

Fierce competition has driven down prices and margins as costs stack up. Domestic demand grew 12 percent in the quarter, but capacity addition stood at 17 percent over a year earlier, Kingfisher said.

Only one analyst tracks the company specifically, according ThomsonReuters StarMine.

A slashing of routes to cut costs resulted in Kingfisher's domestic market share slip to 12.1 percent in December, the No. 5 carrier. In July, it had a 19 percent market share and was the second-largest carrier.

Kingfisher suffered an increase in fuel cost of 1.9 billion rupees during the quarter, a rise of 37 percent from 12 months previous. Fuel costs accounted for 44 percent of operating expenses during the quarter, the company said.

Rival Jet Airways (:JET.NSJET.NS) posted its fourth straight quarterly loss last month on higher fuel costs.

Compounding the impact of rising crude prices, taxes levied by state-run oil marketing companies make jet fuel prices in India among the highest in the world.

A government panel this month approved a plan to allow carriers to import jet fuel directly, a break that could help them cut fuel costs by up to 20 percent but also require new spending.

India's government is expected to soon allow foreign carriers to take a 49 percent stake in local airlines, a move Kingfisher has long called for, which may prove to be the saviour of the troubled industry.

Two major Gulf carriers told Reuters this month that they have no interest in taking a stake in Kingfisher. Kingfisher has also opened talks with SC Lowy Financial, a Hong Kong distressed debt firm, in a sign it may be running out of traditional funding options.

Depreciation and interest charges during the quarter rose 7.5 percent from a year earlier to 4.31 billion rupees.

Shares in Kingfisher, which has never made a profit, have dropped almost 60 percent since the beginning of last year, shrinking the airline's market value to around $270 million.

The company's shares were up 2 percent, or 0.5 rupees, at 10:45 a.m. (0515 GMT) on Thursday, in a Mumbai market down 0.4 percent.

(Editing by Ranjit Gangadharan and Aradhana Aravindan)

Wyeth claims $960 mln from Sun Pharma in Protonix case

MUMBAI (Reuters) - Wyeth Pharmaceuticals Inc is seeking $960 million in damages from Sun Pharmaceutical Industries(:SUN.NSSUN.NS) for alleged patent infringement in launching a generic version of acid reflux drug Protonix in the United States, the Indian company said.

The original patent relating to Protonix, known chemically as pantoprazole sodium, is held by Swiss drugmaker Nycomed and was licensed to Wyeth, which is now owned by Pfizer.

Wyeth and Nycomed, owned by Japan's Takeda Pharmaceutical Co, filed the lawsuit in the U.S. District Court in New Jersey against Sun and Teva Pharmaceutical Industries.

Sun launched its generic version of Protonix tablets in January 2008 after Teva Pharmaceutical Industries and its U.S. subsidiary began selling the drug in December 2007.

"Sun Pharma believes that it has sound reasons to disagree with these overstated claims of Wyeth, and also continues to believe that the patent is invalid and unenforceable and will pursue all available legal remedies including appeals," the company said on Thursday.

Nycomed manufactures a major quantity of pantoprazole in a joint venture with India's Cadila Healthcare. Drugs, in which pantoprazole is a key ingredient, have annual global sales of between $7 billion and $8 billion.

Shares of Sun Pharma fell as much as 3.7 percent in early trade on Thursday, while the broader market was down 0.2 percent.

(Reporting by Sumeet Chatterjee and Kaustubh Kulkarni; Editing by Aradhana Aravindan)

BSE Sensex eases after rally; Sun Pharma down

NEW DELHI (Reuters) - The BSE Sensex eased on Thursday after a 3-day rally as investor mood was dampened by another delay in sealing a bailout for debt-stricken Greece, which could slow down portfolio inflows.

Index heavyweights such as energy conglomerate Reliance Industries and ICICI Bank led the losses, after the main stock index climbed to its highest close in more than six months in the previous session.

Unitech fell as much as 5.2 percent after its telecoms partner Norway's Telenor (Oslo:TEL.OL - NewsTEL.OL) said it would seek indemnity and compensation from the company following a court order to cancel licences held by the joint venture.

It later rebounded was up 1.6 percent by 10:40 a.m. at 32.35 rupees. Unitech said it was surprised by the compensation claim by Telenor and may consider legal action.

Sun Pharmaceutical Industries Ltd (:SUN.NSSUN.NS) shed 2.9 percent to 540.90 rupees after it said Wyeth had claimed $960 million in damages from the company in a lawsuit. The drugmaker said it disagrees with Wyeth's "overstated" claims and would pursue all available legal options.

At 10:40 a.m. (0510 GMT), the main 30-share BSE index was down 0.35 percent at 18,137.87, with 15 of its components falling.

The benchmark, which climbed 2.6 percent in the past three sessions, is up more than 17 percent since the end of December, compared with a nearly 25 percent fall in 2011. Foreign funds have been net buyers of more than $4 billion of Indian shares this year.

"I think there is a growing urge to book some profits and also the global markets are a bit softer," said Neeraj Dewan, director at Quantum securities in New Delhi.

"But as long as liquidity is strong, it is difficult to make a case for a correction. There may be some volatility though," he said.

Reliance Industries, India's most valuable company with a nearly 10 percent weightage in the benchmark index, was down 2.4 percent, extending losses to a third straight day.

No.2 lender ICICI Bank (:ICBK.NSICBK.NS) fell 1.2 percent to 969.50 rupees, paring a nearly 4 percent rise in the previous session. Top lender State Bank of India eased 0.2 percent, while the banking index was down 0.8 percent.

The 50-share NSE index was down 0.42 percent at 5,509.20.

In the broader market, there were 821 gainers for 549 losers on a total volume of about 387 million shares.

Asian shares fell on Thursday as another delay in cementing a crucial bailout for stricken Greece underscored how far Europe is from resolving a debt crisis that threatens the stability of the financial system.

STOCKS ON THE MOVE

* Power utility companies extended gains for a second session after the government directed state-run Coal India to sign long-term fuel supply agreements with private power producers.

Adani Power (:ADAN.NSADAN.NS) was up 6.8 percent, Lanco Infra (:LAIN.NSLAIN.NS) rose 4.5 percent, Tata Power gained 4.3 percent and Reliance Power was up 1.1 percent.

* Kingfisher Airlines (:KING.NSKING.NS) was up 2.1 percent even after the troubled carrier reported a 75 percent increase in losses during the quarter to end-December.

TOP THREE BY VOLUME

* Lanco Infra on 34.3 million shares

* Unitech on 14.4 million shares

* IFCI Ltd (NSE:IFCI.NS - NewsIFCI.NS) on 13.1 million shares

(Reporting by Devidutta Tripathy; Editing by Ranjit Gangadharan)

Amrita Rao's mysterious Valentine

Rachana, Glamsham Editorial

Valentine's Day is a special day and it becomes all the more interesting when you receive gifts and wishes from someone special. However, it becomes exciting and memorable when you bump into an unknown admirer. Something similar happened with our Bollywood actress Amrita Rao.

While celebrating Valentine's Day with her fans as a part of a Rediff Deal Ho Jaye contest, Amrita recalled one of her memorable Valentine's Day. "During one of the Valentine's Day, there was an impromptu party at my place. All my relatives and close friends had come. Suddenly the door bell rang and there was bouquet of flowers specially sent for me. And it was none other than my dad who went and received it. Imagine how embarrassing it was? Everyone present there were amazed along with my dad. And the interesting part is that I had no clue about the anonymous person."

Well, though embarrassing but such moments are unforgettable and you do love cherishing such memories. Hai na Amrita?

Indian students, teachers leave for Pakistan

New Delhi, Feb 16 (IANS) A 19-member team of Indian students and teachers Thursday left for Pakistan on a five-day visit that will take them to three leading schools and some tourist sites in Lahore.

Arranged by Indian group Routes 2 Roots along with a Pakistani NGO, the tour is part of an ongoing programme that involves exposing young minds from the two countries to India and Pakistan.

The students and teachers, drawn from Mumbai and New Delhi, will cross into Pakistan by foot after reaching Amritsar by train. They will return Monday.

The three schools from Delhi which have contributed to the visit are Sanskriti School, St Paul's School and B.R. Mehta School, the organisers said.

In Lahore, the students and teachers will interact with their counterparts in City School and two branches of ILM School.

The Indians will also visit Lahore Museum, Lahore Fort, Badshahi Mosque, Minar-i-Pakistan, Jahangir's Tomb and a gurudwara. They will also be provided time to shop and see Lahore.

Egypt protesters demand justice over stadium deaths

CAIRO (Reuters) - Angry Egyptian soccer fans protested at the general prosecutor's office on Wednesday in Cairo, demanding that authorities bring to court those responsible for soccer violence that left 74 people dead.

Fans and activists said they would take matters into their own hands unless justice was done, putting more pressure on ruling generals already facing public criticism for mismanaging the transition to democracy in the wake of the uprising that began a year ago.

"With our souls and blood, we will protect you martyrs," chanted a crowd of several thousand. "Down, down military rule."

Violence broke out on February 2 at the end of a match between the al-Masry team in the coastal city of Port Said and Cairo's visiting Al Ahly team, the most successful in Africa.

Witnesses said hundreds of al-Masry supporters surged across the pitch to the visitors' end, causing panicking Ahly fans to dash for the exit. Steel doors were bolted shut and dozens were crushed to death in the stampede.

Many of the victims were Al-Ahly's hardcore "ultra" fans, who regularly confront riot police at matches and have been at the front lines of protests that toppled former President Hosni Mubarakfrom power on February 11 last year.

Some critics of army rule suggested the violence was planned to create chaos and push people to support an extension of army rule.

A parliamentary inquiry found fans and lax security to blame, saying that instigators had used thugs and hardcore soccer fans to take "advantage of the tension surrounding the game to achieve some political gains".

"The report is still a preliminary one. Popular determination will force the final report to be very precise," said MP and member of the inquiry team Mohamed Abu Hamed.

(Reporting by Tamim Elyan; editing by Andrew Roche)

Michigan biggest head-to-head fight for Romney, Santorum

DETROIT (Reuters) - After weeks of skirmishes, the two leading Republican U.S. presidential candidates are locked in their biggest head-to-head battle in Michigan - one that tests Mitt Romney's status as the favorite in the race and Rick Santorum's ability to go beyond an insurgent campaign.

Romney and Santorum have launched negative ads against each other in the big Midwestern state, home to the nation's auto industry, which holds its primary on February 28.

Romney, the former Massachusetts governor and private equity executive, needs to win the primary to dispel doubts about the viability of his White House bid.

Romney's opposition to the U.S. government bailout of Michigan automakers in 2009 may come back to haunt him as Santorum rises in polls following his sweep of the February 7 contests in Colorado, Minnesota and Missouri.

Santorum, a former U.S. senator from Pennsylvania, has taken a risk by choosing Michigan as a battleground to take on Romney, who has family ties to Michigan and a strong organization in the economically distressed state.

But a poll of 450 likely Michigan Republican primary voters released on Tuesday found Santorum leading Romney 34 percent to 25 percent in the state. According to the Mitchell/Rosetta Stone Poll, Santorum is outpacing Romney in Michigan among voters who identify themselves as members of the conservative Tea Party movement, evangelical Christians and the "very conservative."

Nationwide, the former underdog Santorum now leads Romney in polls of Republican voters by several percentage points.

The Republican candidates are waging a state-by-state battle to win the party's nomination to challenge President Barack Obama, a Democrat, in the November 6 U.S. general election.

Santorum is braced to come under a heavy barrage of attacks from Romney, whose negative ads helped destroy opponent Newt Gingrich's efforts earlier in the campaign in Iowa and Florida.

'ROMBO' COMMERCIAL

Trying to preempt Romney's assault, Santorum on Wednesday released his own negative ad, which accuses his rival of slinging mud at fellow Republicans.

"Mitt Romney's negative attack machine is back. On full throttle. This time Romney's firing his mud at Rick Santorum," says the ad, entitled "Rombo" and running in Michigan as well as online. The ad shows a man who looks like Romney firing mud from a gun in a disused factory at a moving target of Santorum.

It is an attempt to lessen the harm from a pro-Romney group, Restore Our Future, that has bought $640,000 in airtime in Michigan so far to paint Santorum as a Washington insider who favored big federal spending during his time in the Senate.

"Santorum voted to raise the debt limit five times and for billions in wasteful projects," the pro-Romney ad says.

The Romney campaign also accused Santorum of being "big labor's favorite senator."

Romney spoke on Wednesday in Grand Rapids in a part of the state that is likely to favor Santorum, a social conservative.

Romney explained his opposition to President Barack Obama's $81 billion auto rescue plan - a bailout plan that was popular in Michigan. "Here in Michigan, the president finally came around to my own view that Detroit needed to go through managed bankruptcy, the auto companies needed to go through managed bankruptcy to shed their excess costs," he said.

A new survey by the Democratic-affiliated Public Policy Polling organization showed Obama with a double-digit percentage lead nationally over any of the Republican candidates, with the president leading Romney by 16 percentage points and Santorum by 11 percentage points.

Conversely, Santorum on Thursday will address the Detroit Economic Club, a bastion of the kind of pro-business Republicans who back Romney, the former Bain Capital executive.

Santorum also opposed Obama's $81 billion auto bailout but was less vocal than Romney, who described the car company rescue as "crony capitalism" in an op-ed piece in The Detroit News this week.

TARGETING SANTORUM

Addding to the sense that Santorum's rise is no mere fad, senior Obama campaign adviser David Axelrod targeted Santorum during an appearance on the CBS program "This Morning."

"I don't think the average working person in this country is going to look at his policies and say, 'Yeah, that's the ticket for me,'" Axelrod said.

In the past week, Santorum's views on the role of women in the workplace and in the military have landed him in hot water.

Romney was born in Michigan. His father, George Romney, was governor from 1963 to 1969. Although Romney now has homes in New Hampshire, Massachusetts and California, he will claim Michigan as home, at least for the next two weeks.

Santorum has stressed his Pennsylvania background and strong religious faith as the right fit for many of Michigan's working-class voters. Around one-third of Michigan voters are Roman Catholic like him.

As the insurgent candidate, Santorum lacks the money and organization that Romney possesses.

Michigan officials and party activists said they doubt Santorum's rise in the state will last until primary day.

"I don't see the infrastructure in place. I don't see them doing what they need to do to win," said Bill Nowling, a former communications director for the Michigan Republican Party.

A victory for either man could prove a crucial launching pad for their campaigns heading into "Super Tuesday," March 6, when 10 states hold nominating contests.

Both Santorum and Romney will hit Obama hard for the weakness of Michigan's economy. But many in the state see signs of growth, including a dropping unemployment rate and an unexpected $457 million surplus for the state's budget.

Even a decent second-place finish could be work for Santorum, who long lingered near the bottom of the Republican pack for much of the campaign. On Tuesday, he said in Idaho he hopes to "finish a good, strong second" in Michigan.

(Additional reporting by Susan Heavey in Washington; Editing by Alistair Bell and Todd Eastham)