Author Box
Articles Categories
All Categories
Articles Resources

Kingfisher Demise

February 28, 2012 | Comments: 0 | Views: 70

Kingfisher airline, an India based airline has its Head office in Andheri (East), Mumbai and Registered office in UB City, Bangalore. It was established in 2003 and started operating commercially from 2005. The airline shares around 50% stake in low cost carrier Kingfisher Red through its parent company United Breweries Group (UB Group).

The airline connects 63 domestic destinations and 8 international destinations in 8 countries across Asia and Europe. Its short haul routes serve some cities in South Asia, Southeast Asia and Western Asiaon the Airbus A320 family aircraft. The medium, long haul destinations are in East Asia, Southeast Asia, and Europe. Its first long haul destination was London, United Kingdom

The airline has been honored with numerous award and achievements. It received 3 global awards at the Skytrax World Airline Awards 2010. It was named as the Best Airline in India / Central Asia; Best Cabin Crew - Central Asia and as the Best Low Cost Airline in India / Central Asia. Skytrax rated it as India's only 5 Star Airline. The airline was felicitated with NDTV Profit Business Leadership Award for Aviation. Its India's No. 1 Airline in customer satisfaction rated by Business World; rated amongst India's most respected companies by Business World; India's 25 Innovative Companies by Planman Media in 2006 and is listed in the top 100 most trusted brand in The Brand Trust Report.

The Airline has been in the news from a long time for its popularity. But lately, it is suffering from severe financial crisis. Vijay Mallya is the Indian liquor baron and Chairman of the United Breweries Group and Kingfisher Airlines. Kingfisher Airlines showed a 75 percent wider net loss in December 2011.

Kingfisher lost Rs 444 crore ($90.1 million) in the third fiscal quarter, 74.8 per cent more than a loss of Rs 254 crore a year previously. Revenue fell 15.2 per cent to Rs 13.42 crore.Its share prices have plunged over by 60% bringing down the market value of Kingfisher to 1,300 crore.The carrier is ailing at the moment due to heavy losses, high fuel costs and stiff competition. Mallya's liquor business was also drained before; however the burden was tolerable and manageable. But the airline debris is too hard to digest.

In the financial year, 2010-11, Kingfisher made losses of 1,027 crore. There is an ongoing uncertainty in the minds of the public as well as the employees about the recovery of Kingfisher. They have lost their sense of job safety. The low cost carriers like IndiGo and SpiceJet have been showing good annual profits luring the Kingfisher employees.

His ill business planning practices is a major reason for this decline. So many employees have been promised to pay their last 2 months salaries, but there has been no improvement. The airline employs around 18000 employees. These have lost faith and trust in the airline along with Mallya. They have started searching for jobs with their competitors. Not only this, many have even left to work with their counterpart, IndiGo which runs a successful low fare business and has offered them employment with special bonus. The aircraft crew is dwindling day by day. Kingfisher has also been suspended from IATA Geneva Clearance House for non-payment of dues from ticket sales to partner airlines.

His obsession to overpower his counterpart rival Jet Airways is also responsible for his losses. Neither the Government or any other potential savior is offering him help nor is he himself asking for any bailout. He feels confident of recovering the debris. He has even had a word with Reliance boss Mukesh Ambani for help but as of now he has denied any interest in to buy into a struggling airline.

The banks that already hold some share in Kingfisher are unwilling to extend further help. Even other investors including Sahara promoter Subrata Roy who bought into Mallya's Formula One team and has had business before too disagrees to make a come back.Increasing crude prices and taxes levied by the state oil marketing agencies have become a hindrance in his effort to bring the airline back to life again.

UB Group is suffering indeed. The business principles and modeling followed by Kingfisher Airlines needs complete revision of its policies and rational thinking to even have a market presence again.

Surendra is an expert in the Aviation Sector and generally writes about issues like Flight Booking and keeps a keen eye out on the whole Cheap Domestic Air Tickets side of the Indian Airline space. When not writing, he loves doting his pet dog Sheru and saving the planet one tree at a time

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Kingfisher Demise


Business World


Kingfisher Airline


Kingfisher Made Losses

Teenage rebellion is easier to tolerate in book or film form. Take a look back at some of the most well known and loved "coming of age" stories set in boarding schools.

By: Harvey McEwan l Arts & Entertainment l July 10, 2012 lViews: 444

An important thing you have to consider before working out is having a pair of great training shoes. You cannot immediately undergo any physical training wearing inappropriate footwear. If you do so,

By: Steve Hill l Recreation & Sports l July 10, 2012 lViews: 348

Granite is one natural stone that is used for several purposes from dimension stone to countertops to sculptures. The use of granite for building the temples and monuments was initiated millions

By: Steve L Patterson l Arts & Entertainment l July 10, 2012 lViews: 297

Up to 65,000 H-1B visas for new employment may be issued each fiscal year (FY) for professional workers, including medical providers. In general, a person who already has an H-1B and applies for

By: Ann Badmus l Arts & Entertainment l July 10, 2012 lViews: 308

Beside coin shooting, gold detecting or the many other things you can do with your metal detector. There is a large group of people who take their metal detector out looking for old stuff. Not just

By: Candy L Lindsey l Recreation & Sports l July 07, 2012 lViews: 293

Many people want to be writers and you may be one of them. In order to make your dream occupation a reality, you need to have a plan. You also need to work on this plan constantly. These tips from a

By: Harriet Hodgson l Writing & Speaking l July 06, 2012 lViews: 438

Best way to see the Grand Canyon and the Skywalk? Go by bus. Coach tours are fun and exciting and more importantly they are incredibly affordable.

By: Ione Mahlerl Travel & Leisurel June 07, 2012 lViews: 130

When one thinks of Africa one immediately calls to mind its spectacular wildlife, especially its large mammals. While the big five are mostly associated with eastern and central Africa some of them

By: John Powelll Travel & Leisurel June 06, 2012 lViews: 167

The prehistoric age is composed of the Paleolithic age and the Neolithic Age in Chinese history. The culture in prehistoric period is comprised of the matriarchal clan culture and the patriarchal

By: Young M Qingweil Travel & Leisurel June 05, 2012 lViews: 261

Stress is your body's physical way of responding to "any" kind of demand, and can be caused by positive or negative events. Stress is not always bad, however, must be managed to avoid health risk.

By: Sandy Ingraml Travel & Leisurel June 05, 2012 lViews: 134

Whether you'll be traveling for business or vacation, surely you can't wait to board that plane or ship and go away. But as much as you want to do that at the very instant, it is best spend some time

By: Anne Pascual Travel & Leisurel June 05, 2012 lViews: 145

With the Eurozone in turmoil yet again and the ever-fluctuating exchange rates, it can be difficult for holidaymakers and travellers to know how, when, and where they should exchange their

By: Wendy Kaufmannl Travel & Leisurel June 05, 2012 lViews: 135