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Kingfisher Airlines and Issues: Submitted by Shivani Singh 4 1 1 1 0 4 3 0 4 3

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Avinash Tripathi

Kingfisher Airlines was established in 2003 and began commercial operations in 2005, connecting Bengaluru to London. However, the airline began incurring major losses starting in 2008, after acquiring Air Deccan. Kingfisher took on significant debt but was unable to turn profits, and by 2010 its accounts were frozen by the tax department. The airline suspended many flights in 2011-2012 as it defaulted on payments to airports, fuel suppliers, banks and staff salaries. While discussions were held to revive Kingfisher through foreign investment, its debts and unpaid dues made long-term viability uncertain.

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Kingfisher Airlines and Issues: Submitted by Shivani Singh 4 1 1 1 0 4 3 0 4 3

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Avinash Tripathi
26 views6 pages
Kingfisher Airlines was established in 2003 and began commercial operations in 2005, connecting Bengaluru to London. However, the airline began incurring major losses starting in 2008, after acquiring Air Deccan. Kingfisher took on significant debt but was unable to turn profits, and by 2010 its accounts were frozen by the tax department. The airline suspended many flights in 2011-2012 as it defaulted on payments to airports, fuel suppliers, banks and staff salaries. While discussions were held to revive Kingfisher through foreign investment, its debts and unpaid dues made long-term viability uncertain.

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CORPORATE STRATEGY

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KFA

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Kingfisher Airlines was established in 2003 and began commercial operations in 2005, connecting Bengaluru to London. However, the airline began incurring major losses starting in 2008, after acquiring Air Deccan. Kingfisher took on significant debt but was unable to turn profits, and by 2010 its accounts were frozen by the tax department. The airline suspended many flights in 2011-2012 as it defaulted on payments to airports, fuel suppliers, banks and staff salaries. While discussions were held to revive Kingfisher through foreign investment, its debts and unpaid dues made long-term viability uncertain.

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Download as PPTX, PDF, TXT or read online from Scribd
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26 views6 pages

Kingfisher Airlines and Issues: Submitted by Shivani Singh 4 1 1 1 0 4 3 0 4 3

Uploaded by

Avinash Tripathi
Kingfisher Airlines was established in 2003 and began commercial operations in 2005, connecting Bengaluru to London. However, the airline began incurring major losses starting in 2008, after acquiring Air Deccan. Kingfisher took on significant debt but was unable to turn profits, and by 2010 its accounts were frozen by the tax department. The airline suspended many flights in 2011-2012 as it defaulted on payments to airports, fuel suppliers, banks and staff salaries. While discussions were held to revive Kingfisher through foreign investment, its debts and unpaid dues made long-term viability uncertain.

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Kingfisher Airlines and Issues

SUBMITTED BY; SHIVANI SINGH 4111043043

About KFA
Kingfisher Airlines was established in 2003. It is

owned by the Bengaluru based United Breweries Group The airline started commercial operations in 9 May 2005 and international operations in 2008 by connecting Bengaluru with London KFAs euphoria , ability and stake has been questioned after mid 2008

About KFA financial crisis


Crisis was started with the freezing of the bank

accounts of the airline by the Income Tax Department Ever since its inception it was incurring losses but thing worsen after 2008 After the acquisition of Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years. KFA has under taken debt restructuring process for multiple times but still it is not able to survive

The current status is that Airline is suspended from

IATA In 2010 it went for a debt restructuring process State Bank of India (SBI) on 5th Jan 2012 declared Kingfisher Airlines a NPA further it has been declared NPA by several other bank (BOB, PNB, IDBI, Bank of India ) The SBI is the chief lender to the KFA By February 27, Kingfisher operated only above 150 out of its 400 flights and only 28 aircraft were functional

In 2011 KFA was looking for a second DRP but it

was ruled out by the government KFA is currently facing severe problems relating toDelayed salaries Fuel dues Aircraft lease rental dues Accumulated dues of 255.06 crore to AAI Income tax arrears Frozen bank account

What can be done?


Since almost all the bank and government has

refused to infuse liquidity into the airlines FDI could revive it talks has been going with some of the European and Arabian airlines Airline authorities may cancel the suspension so that airlines could start its operation and try to revive itself The company has to cut off its severe expenses and must not go with live life king size attitude

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