Aeroliea

EISSN 2277-4955

THE KING WITHOUT FISHES...!!!
[CASE ON CRISIS OF KINGFISHER AIRLINES]
Prof. Bhavik M. Panchasara
Marwadi Education Foundation’s Group of Institutions, RajKot, bhavikpanchasara@gmail.com

ABSTRACT
Indian Aviation Industry is one of the fastes t growing markets in the world. But nowadays it is in the news due to
different reason. And that is the failure of one of the leading aviation player - Kingfisher Airlines. The airline has
been facing financial issues for many years. Till December 2011; Kingfisher Airlines had the second largest share
in India's domestic air travel market. However due to the severe financial crisis faced by the airline, it has the fifth
largest market share currently. Even the company have no funds to pay the salaries to the employees andis facing
several other issues like fuel dues; aircraft lease rental dues, service tax dues and bank arrears. This case outlines
the financial turmoil of the Kingfisher in detail.
Keywords: Aviation industry, Kingfisher Airlines, financial turmoil, financial issues, crisis and debt restructuring

INTRODUCTION:

The airline has been facing financial issues for many

Kingfisher Airlines isan airline group based in India.

years. Till December 2011; Kingfisher Airlines had

Its head office is The Qube in Andheri (East),

the second largest share in India's domestic air travel

Mumbai; and Registered Office in UB City,

market. However due to the severe financial crisis

Bangalore. Kingfisher Airlines was established in

faced by the airline, it has the fifth largestmarket

2003. It is owned by the Bengaluru based United

share currently, only above Go Air. Kingfisher

Breweries Group. Kingfisher Airlines, through its

Airlines is one of the only seven airlines awarded 5 -

parent company United Breweries Group, has a 50%

star rating by Skytrax along with Cathay Pacific,

stake in low-cost carrier Kingfisher Red. The airline

Qatar Airways,Asiana Airlines, Malaysia Airlines,

started commercial operations in 9 May 2005 with a

Singapore Airlines, and Hainan Airlines. Kingfisher

fleet of four new Airbus A320-200s operating a flight

operates 250 daily flights with regional and long-haul

from Mumbai to Delhi. It started its international

international services. In May 2009, Kingfisher

operations on 3 September 2008 byconnecting

Airlines carried more than 1 million passengers,

Bengaluru with London.

giving it the highest market share among airlines in
India. Kingfisher also owns the Skytrax award for
India's best airline of the year 2011.

BAUDDHIK

VOLUME 3, NO.-1, JAN-APRIL-2012

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suffered a loss of over Rs. 1,000 crore for three

STARTING OF THE CRISES:executive

years.

By

early

2012,

the

airline

Ever since the airline commenced operations in 2005,

accumulated the losses of over Rs. 7,000 crore with

the company is reporting the losses. But the situation

half of its fleet grounded and several members of its

became more horrible after acquiring the Air Deccan

staff going on strike. Following table 1 highlights

in2007. After acquiring the Air Deccan, the company

losses of the company since inception:

Table 1: Net Reported Losses and debts since inception (Rs. In Crores)
Year

Mar-11

Mar-10

Mar-09

Mar-08

Jun-07

Jun-06

Mar-05

-1027.4

-1646.22

-1608.83

-188.14

-419.58

-340.55

-16.79

Secured Loans

5,184.53

4,842.43

2,622.52

592.38

716.71448.16

159.42

Unsecured Loans

1,872.55

3,080.17

3,043.04

342.00

200.00

3.50

125.06

Loss

DEBT RESTRUCTURING:

CRISIS TILL CONTINUE:

In the situation of loss and tough financial

Debt restructuring also couldn’t change the

condition, the company went for more loans. Table 1

game. By restructuring, company had reduced the

shows the portion of secured...