Kingfisher Airlines, which used to be India's second biggest carrier but is now struggling with crushing debt, has posted another quarterly loss and shed no light on any potential funding lifeline.

Kingfisher, controlled by flamboyant liquor baron Vijay Mallya, is the biggest victim of turbulence in the Indian aviation industry, which has struggled under high state taxes on jet fuel, high airport charges, below-cost fares and an uncertain regulatory environment.

Kingfisher, which has never made a profit since its founding in 2005, lost Rs6.51 billion in April-June, compared with a loss of Rs2.64 billion a year earlier.

The fortunes of Kingfisher, saddled with $1.4 billion in debt, hang on its ability to raise funds soon. It needs at least $500 million immediately to keep operating, according to the Centre for Asia Pacific Aviation consultancy.

It has long hoped that a government proposal to let foreign carriers take a maximum 49 per cent stake in domestic airlines will be made law, providing it a potential lifeline. That proposal is stalled by complicated coalition government politics and there is no clarity on whether or when it will be implemented.

No foreign airline has publicly shown any interest in picking up a stake in Kingfisher.

State-taxes of up to 30 per cent make jet fuel about 50 per cent costlier in India than the global average. Fuel constitutes about half of an airline's total costs.

In India, airport charges are also high, and New Delhi airport has been termed the world's costliest by the International Air Transport Association, an industry body that represents more than 80 per cent of global air traffic.

To add to those woes, Mallya has failed to pay Kingfisher's pilots or crew for months and has regularly faced employee ire over salaries, leading to cancellations of flights.

According to media, Mallya on Thursday told his employees they were free to quit if they believed the actions they were taking to protest against the non-payment of salary were correct.

Mallya, who is a member of parliament, has said that several local and foreign investors were interested in investing in Kingfisher but no money has materialised.

Indian carriers lost about $2 billion in the financial year that ended in March and are reeling under a combined debt load of $20 billion. Privately held IndiGo was the only airline that made money last year.

However, Kingfisher's woes have proven to be a boon to relatively healthier players like top carrier Jet Airways and No.2 budget carrier SpiceJet, which posted surprise quarterly profits last week, indicating the worst may be over for them.-Reuters