CAPA also lambasted regulators for waiting for employees to ground the carrier instead of taking swift action to deal with safety concerns arising from angry staffers who haven't been paid in as long as seven months.
CAPA said Friday that saving the airline would require over $1 billion, including an immediate capital infusion of $600 million. Indian banks, which hold much of Kingfisher's outstanding debt, seem ready to work with the company, rather than face write-downs, but the UB Group, Kingfisher's parent company, would also have to come up with more cash, CAPA said.
Mallya and his UB Group have already pumped in nearly $1 billion to save the carrier, according to CAPA.
Mallya's liquor subsidiary, United Spirits, said last week it was talking with British drinks giant Diageo about a stake sale. Mallya has also said he's in talks to sell a stake in Kingfisher Airlines, after New Delhi last month permitted foreign carriers to invest up to 49 percent in domestic airlines. But analysts say he's unlikely to attract a foreign partner until Kingfisher clears some debt, resumes flying and improves employee morale.
CAPA puts Kingfisher's outstanding debt at $2.5 billion and says its accumulated losses swelled to $1.9 billion by the end of June.
The airline is flying less than one-fifth of the number of planes it was a year ago and its share of the domestic market plunged to 3.2 percent in August, CAPA said.
"Businesses sometimes fail, there is nothing wrong with that," the group wrote.