Kingfisher has turned to its big consolidators to raise money. With bank lending drying up and equity markets not conducive, India's second-largest airline by market share is relying on money released ahead of the payments cycle by these consolidators to meet its expenses. 

About eight months ago, Kingfisher requested the consolidators to pay for tickets at the beginning of the month itself, instead of in cycles. In return, the airline agreed to pay 3% interest every month to the consolidators as per a report by Manisha Singhal in ET. The airline has upset rivals who blame the practice for the losses they suffer through discounted tickets. 

Kingfisher Airlines has reported an increase in its net loss for the first quarter of the current fiscal at Rs.263.54 crore as compared to Rs.187.34 crore in the like period of 2010-11. "Net loss as a percentage of total revenue stood at 14 percent in Q1 FY12. The benefits of debt restructuring and improved operating performance were offset by the rise in fuel price," the company said in a regulatory filing to the Bombay Stock Exchange (BSE).

Kingfisher posted a loss of Rs 1,027 crore for the last financial year and recently completed a debt restructuring under which lenders agreed to convert a portion of their loans to equity to ease the debt burden. Kingfisher still pays Rs 800 crore annually towards interest costs (at 12.5%) and has over Rs 6,000 crore of debt on its books. Payments to suppliers have been erratic, forcing one of them, HPCL, to shut fuel supply last month at the Delhi airport, a move which threw operations out of gear for an hour. The firm also owes money to the Airports Authority of India and to some private airport operators.