Kingfisher Airlines Chairman Vijay Mallya has said that Indian airline industry is currently experiencing one of the toughest operating environments in the world, but added that fiscal reforms by the government would make the environment more conducive for the industry.

In the company's 'Report of the Directors,' Mallya said that Indian airline industry is currently exposed to high prices for fuel, high cost of borrowing, and rupee depreciation.

However, he added in the report, "The Government of India is in the process to usher in fiscal measures and reforms that will make the operating environment more conducive for profitable business."

He further added that the government is on the way to modify the country's Foreign Direct Investment (FDI) policy to allow foreign airlines to make investments in Indian airlines. Relaxing of FDI norms by the government could allow Indian carriers to have broader access to foreign equity capital and also provide them with the potential to induct strategic partners.

Struggling Kingfisher's net loss jumped from Rs 1,027 crore in 2010-11 to Rs 2,328 crore in 2011-12. As of March 31 this year, the carrier was burdened with long-term borrowings of Rs 5,695 crore. Short-term borrowings stood at Rs 2,335 crore.

The Kingfisher report also revealed that company is currently working on a "holding pattern" basis with restricted operation, pending policy changes.