kingfisher journey
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INTRODUCTION Kingfisher Airlines is one of the only seven airlines awarded 5-star
rating by Skytrax along with Cathay Pacific, Qatar Airways, Asiana
Airlines, Malaysia Airlines, Singapore Airlines, and Hainan Airlines.
Kingfisher operates more than 375 daily flights to 71destinations,
with regional and long-haul international services. In May 2009,
Kingfisher Airlines carried more than 1 million passengers, giving it
the highest market share among airlines in India. Kingfisher also
owns the skytrax award for India's best airliner of the year 2011.
Kingfisher Airlines is also the sponsor of F1 racing outfit,Force India,
which Vijay Mallya also owns.
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HISTORY Kingfisher Airlines was established in 2003. The
airline started commercial operations in 9 May 2005with a fleet of four new Airbus A320-200s operating aflight from Mumbai to Delhi.
It started its international operations on 3 September2008 by connecting Bengaluru with London.
Ever since its launch in May 2005, Kingfisher Airlineshas blazed a trail of innovations and introduced a rangeof market-firsts that have completely redefined thewhole experience of flying.
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Cont. They were initially incorporated as a private
limited company on June15, 1995 in Karnatakawith the main object of pursuing chartered
aviation services both for commercial and noncommercial purposes in India and to provideall aviations related services.
Kingfisher Airlines was the first Indian airlineto introduce in-flight entertainment (IFE) systemon domestic flights.
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KINGFISHER CRISIS Kingfisher is facing financial problem from last few years and due
to that they are not able to pay salary to their workers. Due to thisproblem, pilots and co-workers are leaving their job and hencethey are not having pilots and so their plane are idle.
Eleven public sector banks, which were alloted shares by KingfisherAirlines as part of debt recast package, have seen erosion of aboutRs 165 crore in the value of the 17.5 per cent equity held by them inthe debt-ridden carrier.
These banks, including State Bank of India, PunjabNational Bank, Bank of India and IDBI Bank were
allotted 8.8%Kingfisher shares on March 31, 2011
at Rs 64.48 a piece as per the SEBI formula.
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Cont. A shocking 149 flights - 36% of its daily allocated schedule -
were not operated. Officially, Kingfisher has said that it has
cancelled flights to reconfigure its Airbus A-320 aircraft.However, it is learnt that around 130 pilots have quit thecash-strapped carrier in the past few weeks.
Also, airport operators and oil companies have massive duesrunning with Kingfisher and are demanding that owner VijayMallya pay up. Given the shortage of crew and funds, theairline has truncated its schedule, perhaps opting to "fly less
and spend less".
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Cont. Kingfisher Airlines fell to fifth place in domestic market
share during November, from third in the previousmonth, after the cash-strapped carrier grounded planesand cut routes.
Kingfisher, which was once India's second largest carrierby passengers, recorded a market share of 14%,aheadonly of budget carrier Go Airlines.
It has debt of about 65 billion rupees owed toa consortium of banks led by State Bank of India.
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COMPETITORS The country's largest airline, Jet Airways, including its unit JetLite,
had the largest market share of 27.1%, followed by budget carrierIndiGo with 19.8% and Air India with a 17.4%
That growth has failed to translate into profits for India's airline
industry, where all the major carriers except Indigo are loss-making,hit by high jet fuel costs and an inability to raise fares in a cut-throatmarket.
The Centre for Asia Pacific Aviation has forecast a record USD 2.5
billion to USD 3 billion loss for Indian airlines industry for the fiscalyear ending March 2012, with state- run Air India alone likely toaccount for more than half of it
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MORE PROBLEMS Cash-strapped carrier Kingfisher Airlines
has not deposited with the government most of
the income tax it deducted from its
employees' salaries for the last two fiscal years.
Kingfisher has about Rs. 130 cr. tax deducted at
source to be deposited with the government andhas committed to pay it by the end of the current
financial year to March 2012.
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HELPING HAND The lenders to struggling Kingfisher Airlines are trying
to help it and are open to extending further loans to the
carrier, said the leader of a consortium of the airline's banks.
Kingfisher shares rose more than 2% after the SBI chairman'scomments. Indian company Sahara , meanwhile , plans to lendKingfisher more than Rs. 750 cr.
Along with these provisions, even the
government is planning to give a
bailout to the debt-laden carrier- KINGFISHER
so as to support the Indian aviation industry.
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PROPOSALS Kingfisher Airlines will become part of the
global airlines' alliance 'one world' with effect
from February 10 next year. The Vijay Mallya-
owned carrier would become the first airline
from the subcontinent to join any of the
global airline groups, the two others
being 'Star Alliance' and 'Sky Team',spokespersons of the airline and the alliance
said.
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THE FINAL VERDICT Kingfisher Chairman Vijay Mallya said last month that Kingfisher
stopped flying on heavily loss-making routes, and the carrier hadalso grounded some aircraft for fleet reconfiguration after theairline decided to discontinue its low-cost business.
Debt-laden Kingfisher is scouting for funds and is negotiating withits lenders for 7 billion rupees of working capital.
The airline aims to cut debt to 37 billion rupees through sale andlease-back of aircraft, sale of a property in Mumbai and conversion
of rupee loans into foreign loans at a lower interest rate.
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Cont. Besides the DGCA scrutiny, Kingfisher faces the threat of
unpaid aircraft leasing companies seeking the return of their
planes. Spare part vendors too - like other creditors - want
their past dues to be cleared along with current ones.
In its current health, Kingfisher has two options - shut down
or downsize significantly to survive for some time till either
the environment improves or a suitor is ready to buy the
airline.
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