Kingfisher Project

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EXECUTIVE

EXECUTIVE SUMMARY:SUMMARY:-

-Our Research is mainly based on the intensive study of crisis faced by Our Research is mainly based on the intensive study of crisis faced by Kingfisher

Kingfisher Airlines Airlines owned owned by by Business Business tycoon tycoon Vijay Vijay Mallya. Mallya. Kingfisher Kingfisher AirlinesAirlines began its

began its operations operations on on 9th May, 9th May, 2005 2005 and ever and ever since 2since 2005 Ki005 Kingfisher Airlingfisher Airlines hanes hass blazed

blazed trial trial of of innovations innovations and and introduced introduced a a range range of of market. market. On On June June 15, 15, 05 05 itit became

became first first and and only only Indian Indian Airline Airline to to order order Airbus. Airbus. As As of of July July 2007, 2007, KingfisherKingfisher operates

operates only only on on domestic domestic routes; horoutes; however it wever it started started its its international international operations operations onon 3rd

3rd September, September, 2008 2008 with with a a flight flight between between Bangalore Bangalore and and London, London, and and later later onon added

added new new international international destinations, destinations, namely namely Hong Hong Kong, Kong, Dhaka, Dhaka, Colombo,Colombo, Singapore, Dubai and Bangkok. However, on 15th September 2009, Kingfisher Singapore, Dubai and Bangkok. However, on 15th September 2009, Kingfisher

Airlines

Airlines withdrew withdrew the London the London service. As service. As life is life is full of full of up’s and up’s and down’s Mdown’s Mr. Mr. Mallyally a a also is

also is now facing now facing the Question the Question of its of its survival in survival in the Airline the Airline sector due sector due to its to its LossesLosses and heavy Debts.

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OBJECTIVES:- a.

a. To create awareness regarding the crises of Kingfisher airlines.To create awareness regarding the crises of Kingfisher airlines.

b.

b. To obtain information regarding the crises of kingfisher airlines.To obtain information regarding the crises of kingfisher airlines.

c.

c. To extent knowledge.To extent knowledge.

d.

d. To find out major areas, which has led to crises?To find out major areas, which has led to crises?

e.

e. To find out a proper effective solution.To find out a proper effective solution.

f.

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RESEARCH

METHODOLOGY:- Research

Research Methodology Methodology deals deals with with collection collection of of Data Data which which are are of of two two typestypes Primary and Secondary data.

Primary and Secondary data.

Our research is based on secondary type data collection which includes Our research is based on secondary type data collection which includes second hand dat

second hand data. In sa. In simple words imple words it is it is a data a data which is not which is not collected directly collected directly from afrom a

user. It’s collected via Newspapers, Magazine, Websites, Expert’s

user. It’s collected via Newspapers, Magazine, Websites, Expert’s advice, old advice, old research literature, etc.

research literature, etc.

Our data is collected through Websites and Newspapers. Our data is collected through Websites and Newspapers.

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INDEX:-Sr.

Sr. No. No. Topic Topic Page Page No.No.

1.

1. Review Review Of Of Literature. Literature. 55

2.

2. Findings. Findings. 1212

3.

3. Analysis & Interpretations. Analysis & Interpretations. 1414

4. 4. Recommendation. Recommendation. 17 17 5. 5. Conclusion. Conclusion. 1818 6. 6. Bibliography. Bibliography. 1919

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REVIEW OF

LITERATURE:- Kingfisher

Kingfisher Airline Airline was was established established in in 2003, 2003, owned owned by by the the Bengaluru Bengaluru based based United Breweries Group. It began its operation on 9 May 2005, following the lease United Breweries Group. It began its operation on 9 May 2005, following the lease of

of four four Airbus Airbus A320 A320 aircraft. aircraft. Kingfisher Kingfisher Airline Airline became became the the first first and and only only IndianIndian airline

airline to to order order the the Airbus Airbus A380. A380. On On 7 7 June June 2010 2010 Kingfisher Kingfisher became became a a membermember elect of the Oneworld airline alliance when it signed a formal membership elect of the Oneworld airline alliance when it signed a formal membership agreement.

agreement. The The Airlines Airlines serves serves 63 63 domestic domestic destinations destinations and and 8 8 international international destinations in 8 countries across Asia and Europe.

destinations in 8 countries across Asia and Europe.

Kingfisher

Kingfisher Airlines Airlines have have wonwon many awards and achievements King many awards and achievements King Club has won Top Honours at the Club has won Top Honours at the 21st

21st Annual Annual Freddie Freddie Awards Awards in in thethe Japan,

Japan, Pacific, Pacific, Asia Asia and and AustraliaAustralia region.

region. Kingfisher Kingfisher Airlines Airlines hashas received

received three three global global awards awards at at thethe Skytrax World Airline Awards 2010 Skytrax World Airline Awards 2010 and

and many many more more achievements achievements are are inin Kingfisher Airlines bag.

Kingfisher Airlines bag.

Kingfisher

Kingfisher Airline Airline Listed Listed in in the the top top 100 100 most most trusted trusted brand brand in in The The Brand Brand Trust Report.

Trust Report.

Since 2010 Kingfisher Airlines faces some ups and downs in Nov 2010. Since 2010 Kingfisher Airlines faces some ups and downs in Nov 2010. Kingfisher,

Kingfisher, 'the 'the king king of of good good times' times' has has managed managed to to change ichange its ts tagline tagline to to 'the 'the kingking of

of bad bad times'. times'. The The UB UB spirits spirits tag tag line line can can be be used used very very appropriately appropriately for for whatwhat Mallya is

Mallya is currently gocurrently going throing through with ugh with his his Kingfisher AirlKingfisher Airlines. What ines. What made tmade the fall he fall of the King of good times?

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Kingfisher Airlines

Kingfisher Airlines is is one of one of the only the only seven airlines seven airlines awarded 5awarded 5-star rat-star rating bying by Skytrax. Kingfisher operates more than 375 daily flights to 71 destinations, with Skytrax. Kingfisher operates more than 375 daily flights to 71 destinations, with regional

regional and and long-haul long-haul international international services. services. In In May May 2009, 2009, Kingfisher Kingfisher AirlinesAirlines carried

carried more more than than 1 1 million million passengers, passengers, giving giving it it the the highest highest market market share share amongamong airlines

airlines in in India. India. The The airline airline started started commercial commercial operations operations in in 9 9 May May 2005 2005 with with aa fleet of four new Airbus A320-200s operating a flight from Mumbai to Delhi.

fleet of four new Airbus A320-200s operating a flight from Mumbai to Delhi.

Kingfisher

Kingfisher Airlines Airlines hashas accumulated

accumulated loss loss of of over over Rs Rs 4,2834,283 crore

crore (Rs (Rs 42.83 42.83 billion) billion) at at the the end end of

of March 31, March 31, 2011 2011 and and never manever madede even a rupee in profit since it was even a rupee in profit since it was launched in 2005.

launched in 2005.

In

In Nov Nov 2010, 2010, KingfisherKingfisher Airlines

Airlines has has completed completed restructuring

restructuring 8,000 8,000 crore crore ($1.62($1.62 billion)

billion) debt, debt, with with all all 18 18 lenderslenders

agreeing to cut interest rates and convert part of loans to equity. agreeing to cut interest rates and convert part of loans to equity.

In Jul

In Jul 2011, 2011, Hindustan Hindustan Petroleum Petroleum Corporation Corporation Limited Limited (HPCL) stopped (HPCL) stopped thethe fuel

fuel (ATF) (ATF) supplies supplies for for about about two two hours hours to to Kingfisher Kingfisher airlines airlines owing owing to to the the non- non- payment

payment of of dues. Sitdues. Situation uation was was later later resolved. resolved. In In the the past past several several years, Kiyears, Kingfisherngfisher airlines

airlines have have had had trouble trouble paying paying their their fuel fuel bills. bills. Bharat Bharat Petroleum Petroleum Corporation Corporation inin 2009

2009 had had filed filed a a case case against against Kingfisher Kingfisher airlines airlines for for non-payment non-payment of of dues. dues. HighHigh court in an order

court in an order said that the esaid that the entire amount ($49.69 mntire amount ($49.69 million) had to be illion) had to be paid by Novpaid by Nov 2010 and the airline paid it in installments.

2010 and the airline paid it in installments.

In

In Nov Nov 2008, 2008, GE GE Commercial Commercial Aviation Aviation Services Services threatened threatened to to repossess repossess 0404 leased planes in lieu of default. Kingfisher Airlines initially denied that it missed the leased planes in lieu of default. Kingfisher Airlines initially denied that it missed the payments.

payments. In In Jul 2Jul 2010, 010, DVB AviatioDVB Aviation Fin Finance Asia nance Asia Ltd Ltd (a (a lessor lessor from from Singapore),Singapore), sued

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UK court on Jul 16, 2010 after Kingfisher did not pay for three month lease rental UK court on Jul 16, 2010 after Kingfisher did not pay for three month lease rental for A320 aircraft it leased from DVB.

for A320 aircraft it leased from DVB.

Salaries were normally credited to the accounts of its employees on the 7th Salaries were normally credited to the accounts of its employees on the 7th day of every month. It has also been alleged that the tax comp

day of every month. It has also been alleged that the tax company deducted from theany deducted from the salaries

salaries wasn't wasn't being being paid paid to to the the tax tax department. department. Its Its total total debt debt rose rose to to an an alarmingalarming proportion

proportion before before the the Reserve Bank Reserve Bank of of India India approved approved debt debt restructuring restructuring by pby publicublic sector

sector and and private private banks banks in in early early 2011. 2011. After After recast, recast, Kingfisher Kingfisher Airlines Airlines total total debtdebt reportedly

reportedly came came down down to to Rs Rs 7,057 7,057 crore crore which which is is still still considered considered very very high high for for aa private domestic carrier.

private domestic carrier.

In

In the the debtdebt restructuring

restructuring done done byby banks, 13

banks, 13 in all, in all, they agreed they agreed to convert

to convert a big a big part of part of theirtheir debt

debt into into equity equity byby acquiring

acquiring the the KingfisherKingfisher Airlines

Airlines share share at at Rs Rs 63 63 perper share

share as as against against the the thenthen prevalent

prevalent price price of of Rs Rs 40.40. The banks, in all, hold over The banks, in all, hold over 24

24 percent percent of of the the airlineairline

equity. But between then and now, the share value has eroded sharply to around Rs equity. But between then and now, the share value has eroded sharply to around Rs 22 which is just o

22 which is just one-third of what it ne-third of what it was when the shares were giwas when the shares were given to them as paven to them as partrt of

of debt debt restructuring. restructuring. So So one one can can imagine imagine how how the the banks banks have have also also suffered suffered aa serious blow.

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Kingfisher

Kingfisher Airlines Airlines has has delayed delayed salaries salaries (for (for Jul Jul 2011) 2011) of of its its employees employees inin Aug

Aug 2011. 2011. The The management management stated stated that that it it does does not not have have the the money, money, and and has has notnot given any

given any date for date for the payment. the payment. Kingfisher airline Kingfisher airline had earlier had earlier stated stated that due that due to theto the bank strike, the salaries could not be processed.

bank strike, the salaries could not be processed.

Salaries were normally credited to the accounts of its employees on the 7th Salaries were normally credited to the accounts of its employees on the 7th day of every month. It has also been alleged that the tax comp

day of every month. It has also been alleged that the tax company deducted from theany deducted from the salaries wasn't being paid to the tax department.

salaries wasn't being paid to the tax department.

After

After all, all, about about two two months months back, back, media media reported reported the the observations observations made made byby Kingfisher

Kingfisher Airlines' Airlines' auditors auditors -- -- namely, namely, B B K K Ramdhyani Ramdhyani & & Co. Co. In In accountingaccounting parlance,

parlance, they they asked asked if if Kingfisher Kingfisher Airlines Airlines could could be be even even described described as as a a 'going'going concern'

concern' and and these these remarks remarks were were published published in in the the 2010-11 2010-11 annual annual report report of of thethe company.

company.

A

A 'going 'going concern' concern' refers refers to to a a company's company's ability ability to to continue continue functioning functioning as as aa business

business entity entity in in the the near near future future and and it it is is extremely extremely rare rare that that auditors auditors make make suchsuch mention in the passing.

mention in the passing.

Welcoming the Prime Minister Dr Manmohan Singh's recent statement that Welcoming the Prime Minister Dr Manmohan Singh's recent statement that the Government

the Government would find would find ways to ways to solve tsolve the aviation he aviation industry's industry's financial financial troubles,troubles, he

he said: said: "The "The Prime Prime Minister Minister is is an an economist economist who who understands understands the the importance importance of of connectivity."

connectivity."

About the dues

About the dues to oil comto oil companies, he said tpanies, he said the airline has he airline has paid two spaid two state-owned tate-owned oil companies

oil companies Indian Oil Indian Oil and Bharat and Bharat Petroleum iPetroleum in full. "We n full. "We don't owe don't owe those singlethose single paise."

paise."

On the Rs 600-crore worth of unsecured dues to HPCL, the Chairman said On the Rs 600-crore worth of unsecured dues to HPCL, the Chairman said the

the oil oil firm firm has has been been given given bank bank guarantees guarantees and and our our unsecured unsecured credit credit has has nownow come down to Rs 40 crore only.

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The chief of the UB Group, The chief of the UB Group, which runs Kingfisher, also which runs Kingfisher, also announced

announced that that the the company company hashas applied

applied to to the the Directorate Directorate General General of of Foreign

Foreign Trade Trade (DGFT) (DGFT) for for directdirect import of jet fuel, which would reduce import of jet fuel, which would reduce fuel

fuel costs costs drastically. drastically. Jet Jet fuel fuel costscosts are

are almost almost 50 50 per per cent cent of of the the total total operating

operating costs costs of of the the airline. airline. MallyaMallya also said there were

also said there were varied credit linesvaried credit lines with various suppliers and vendors of with various suppliers and vendors of the

the airline airline and and refuted refuted reports reports thatthat certain

certain lessors lessors wanted wanted to to take take back back some some of of the the leased leased aircraft aircraft in in the the KingfisherKingfisher fleet.

fleet.

Referring to

Referring to the cancellation the cancellation of mof more than ore than 200 flig200 flights over hts over the past the past week, heweek, he justified the move saying it was a commercially prudent decision.

justified the move saying it was a commercially prudent decision.

The entire restructuring also included a reduction in interest rates. The The entire restructuring also included a reduction in interest rates. The banks took

banks took a revenue loss a revenue loss of around of around Rs 500 Rs 500 crore when the crore when the debt was debt was converted intoconverted into equity.

equity.

The bankers of Kingfisher, who met in Mumbai on Saturday, are holding The bankers of Kingfisher, who met in Mumbai on Saturday, are holding further rounds of talks on its debt restructuring.

further rounds of talks on its debt restructuring.

Top government officials said the troubled private carrier may get support Top government officials said the troubled private carrier may get support from public

from public sector banks sector banks as finance as finance minister Pranab minister Pranab Mukherjee had Mukherjee had put in put in a word.a word. But

But the the government government is is in in a a fix fix as as any any incentive incentive offered offered to to Kingfisher Kingfisher would would meanmean other airlines, too, would ask for the same.

other airlines, too, would ask for the same.

Kingfisher

Kingfisher is is looking looking for for additional additional working working capital capital to to tide tide over over its its cashcash crunch.

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requirements following a surge in the price of jet fuel in recent months. requirements following a surge in the price of jet fuel in recent months.

Last

Last month, month, it it axed axed its its low-costlow-cost service

service Kingfisher Kingfisher Red Red to to maximisemaximise revenues

revenues from from full-fare full-fare flights. flights. TopTop officials

officials said said the the airline airline was was alsoalso contemplating

contemplating laying laying off off a a fewfew thousands

thousands employees employees to to stay stay afloat. afloat. OnOn Sunday, Kingfisher cancelled 40 more Sunday, Kingfisher cancelled 40 more flights

flights taking taking the the total total to to over over 250 250 inin one

one week week and and putting putting thousands thousands of of passengers to inconvenience.

passengers to inconvenience.

“We cancelled flights not because we could not afford to. Even today “We cancelled flights not because we could not afford to. Even today

Kingfisher

Kingfisher is is operating operating the the rest rest of of its its schedule schedule ... ... We We could could have have handled handled thethe situation

situation better. better. But it But it (flight (flight cancellations) cancellations) was was a a commercially commercially prudent decisioprudent decision,"n," Mallya said.

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DEBT CONSTRUCTION DEBT CONSTRUCTION

Kingfisher

Kingfisher has has been been asked asked by by its its creditors creditors to to raise raise $160 $160 million million in in equity.equity. Hemant

Hemant Contractor, Contractor, managing managing director director of of creditor creditor State State Bank Bank of of India, India, had had said said the airline was

the airline was considering a considering a proposal to proposal to sell real essell real estate, but Malltate, but Mallya denied the ya denied the firmfirm was considering that course of action.

was considering that course of action.

The carrier, which has never turned a profit since its launch in 2005, saw its The carrier, which has never turned a profit since its launch in 2005, saw its fuel bill jump 70% in the September quarter from a year earlier.

fuel bill jump 70% in the September quarter from a year earlier.

While passenger revenue rose 9%, its revenue per average seat kilometre fell While passenger revenue rose 9%, its revenue per average seat kilometre fell

by 16% from a year even as it’s cost per average seat kilometre rose 8%. by 16% from a year even as it’s cost per average seat kilometre rose 8%.

Earlier

Earlier this this year, year, Kingfisher, Kingfisher, India’s India’s No.2 No.2 carrier carrier by by market market share, share, cut cut itsits

debt through

debt through a restructuring ba restructuring by issuing sy issuing shares to 14 hares to 14 banks, including banks, including State Bank of State Bank of India and ICI

India and ICI CI Bank, the country’s two biggest lenders.CI Bank, the country’s two biggest lenders.

Kingfisher’s

Kingfisher’s net net loss loss in in the the quarter quarter ended ended 30 30 September September deepened tdeepened too Rs. 469Rs. 469 crore ($93 million) from Rs. 231 crore in the

crore ($93 million) from Rs. 231 crore in the year-ago period. Its loss was iyear-ago period. Its loss was its biggestts biggest since the March 2010 quarter.

since the March 2010 quarter.

“While all airline

“While all airline s s have have taken taken a a deep deep hit hit this this quarter quarter because because of of high high fuel fuel prices,

prices, Kingfisher Kingfisher is is in in such such a a bad bad shape shape that that they they need need to to look look for for funds funds to to staystay

afloat,” said Neeraj Dewan, director at New Delhi

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FINDINGS:-MOUNTING LOSSES

MOUNTING LOSSES

Since inception, Kingfisher Airlines is yet to post profit on annual & total Since inception, Kingfisher Airlines is yet to post profit on annual & total cost

cost basis. Following basis. Following are are financial financial results results of of Kingfisher Kingfisher Airlines, Airlines, all all numbers numbers areare in

in Indian rupeeIndian rupee (INR)(INR) crore:

crore:--Sr.

Sr. No. No. From From To To Months Months Total Total Income Income Cost Cost Net ProfitNet Profit

01

01 Apr-05 Apr-05 Jun-06 Jun-06 15 15 1,352 1,352 1,689 1,689 -337 -337

02

02 Jul-06 Jul-06 Jun-07 Jun-07 12 12 2,142 2,142 2,562 2,562 -420-420

03

03 Jul-07 Jul-07 Mar-08 Mar-08 09 09 1,546 1,546 1,734 1,734 -188-188

04

04 Apr-08 Apr-08 Mar-09 Mar-09 12 12 5,577 5,577 7,186 7,186 -1,609-1,609

05

05 Apr-09 Apr-09 Mar-10 Mar-10 12 12 5,271 5,271 6,918 6,918 -1,647 -1,647

06

06 Apr-10 Apr-10 Mar-11 Mar-11 12 12 6,496 6,496 7,523 7,523 -1,027 -1,027

07

07 Apr-11 Apr-11 Sep-11 Sep-11 06 06 3,410 3,410 4,142 4,142 -732-732

Total

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FUEL DUES FUEL DUES

 HPCL: HPCL: In Jul 2011,In Jul 2011, Hindustan Petroleum Corporation Limited Hindustan Petroleum Corporation Limited (HPCL)(HPCL) stopped stopped the

the fuel fuel supplies supplies for for about about two two hours hours to to Kingfisher Kingfisher airlines airlines owing owing to to the the non- non- payment

payment of of dues. dues. Situation Situation was was later later resolved. In resolved. In the the past past several several years,years, Kingfisher airlines have had trouble paying their fuel bills.

Kingfisher airlines have had trouble paying their fuel bills.

 BPCL: BPCL: Bharat Petroleum CorporationBharat Petroleum Corporation in 2009 had filed a case againstin 2009 had filed a case against Kingfisher

Kingfisher airlines airlines for for non-payment non-payment of of dues.dues. High courtHigh court in an order said thatin an order said that the

the entire entire amount amount ( ( 245245 crorecrore (US$(US$ 49.69 49.69 million) million) had had to to be be paid paid by by Nov Nov 20102010 and the airline paid it in installments

and the airline paid it in installments

MISTAKES COMMITTED BY KINGFISHER: MISTAKES COMMITTED BY KINGFISHER:

Here

Here are are some some of of the the possible possible decisions decisions and and factors factors that that led led the the KingfisherKingfisher Airlines into the crisis.

Airlines into the crisis.



 It borrowed heavily to fund loss making airline and fell into a debt trap. It borrowed heavily to fund loss making airline and fell into a debt trap.



 It bought new aircraft when the industry suffered from heavy c It bought new aircraft when the industry suffered from heavy capacity.apacity.



 Kingfisher Kingfisher was was blinded blinded by by a a desire desire to to overtake overtake Jet Jet Airways Airways and and become become thethe

king of skies king of skies



 Focusing in flamboyance, it ignored the low cost airline model. Focusing in flamboyance, it ignored the low cost airline model.



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ANALYSIS &

INTERPRETATIONS:-Over the past few days, a lot has been said, and even more speculated by the

Over the past few days, a lot has been said, and even more speculated by the

media

media and and the the common common man man about about the the Kingfisher Kingfisher Airlines Airlines working working schedule schedule and and

their

their losses. losses. There There was was a a phase phase when when we we even even heard heard news news like like "Poor "Poor days days for for thethe

Good Times", "Kingfisher to shut down", and even "Kingfisher asks for a bailout

plan". While the first

plan". While the first one can be said one can be said to be corto be correct, the media rect, the media speculating about thespeculating about the

future

future of of the the airlines airlines without without knowing knowing much much about about its its plans plans was was nothing nothing less less thanthan

rubbish t

rubbish talks. As alks. As everybody knoeverybody knows, media ws, media in India in India is is more abmore about making out making hype of hype of aa

thing

thing than than to to present present its its actual actual reality, reality, and and this this being being such such a a big big news news had had nono

chances of being spared.

Kingfisher

Kingfisher Airlines, Airlines, no no doubt, doubt, is is trouble-ridden trouble-ridden and and desperately desperately needs needs somesome

capital

capital to to get get rid rid of of its its debts. debts. But But never never has has Dr. Dr. Mallya Mallya asked asked the the IndianIndian

Government for a bailout. While on the one hand, Dr. Mallya has never seen

Kingfisher

Kingfisher Airlines Airlines gain gain profit profit from from its its operations, operations, one one cannot cannot ignore ignore the the fact fact thatthat

he

he is is also also the the Chairman Chairman of of the the United United Breweries Breweries Group, Group, India's India's number number 1 1 and and

world's number 3 spirits company. He has enough assets held with the UB Group,

and

and at at any any point point of of time, time, he he will will consider consider going going for for a a capital capital exchange exchange with with UBUB

Group rather than asking the government for a bailout by using the taxpayers'

money.

money. And And why why should should he he continue continue flights flights to to routes routes that that only only make make losses? losses? WeWe

don't

don't see see logic logic behind behind it, it, at at all. all. In In fact, fact, cutting cutting down down the the flights flights will will only only boost boost upup

the airline's performance and will help them provide better services in future.

Coming to the demands made by him, we did not find a single point where we

could prove him wrong, or even 'greedy'. After all, being a businessman, you always

aim at m

aim at making profit, aking profit, and there's nothiand there's nothing wrong with ng wrong with it. When he it. When he asks for asks for loweringlowering

of taxes

of taxes on the on the ATF, he ATF, he is is not asknot asking thing that fat for Kingfisher or Kingfisher Airlines Airlines only. The only. The IndianIndian

Government has been offering infinite subsidies on items like LPG,

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Diesel and Kerosene for years

Diesel and Kerosene for years now. The airline companies now. The airline companies just want lowering of tjust want lowering of thehe

taxes,

taxes, not not a a subsidy, subsidy, and and this this will will ultimately ultimately improve improve the the performance performance of of the the worstworst

performing air

performing air carrier of carrier of the country, the country, Air India, Air India, as well. as well. For the For the last two last two years, theyears, the

civil

civil aviation aviation department department have have been been infusing infusing millions millions of of Rupees Rupees in in Air Air India India toto

sustain

sustain its its capabilities. capabilities. And And we we are are not not surprised surprised that that the the media media has has not not taken taken thethe

hype to a great level, after all the media is controlled by the Government policies.

Let's

Let's forget forget about about the the ATF ATF prices prices for for sometime sometime and and talk talk about about the the Forex.Forex.

Today, Rupee hit an all-time low of 52.65/1$, and the RBI has till now only hinted

for

for some some actions. actions. There There have have been been earlier earlier periods periods of of volatility volatility and and the the RBI RBI waswas

quick to respond all those times. A weakening rupee results in increase of costs of

the imported

the imported items, mainly items, mainly fuel, and fuel, and if the if the RBI wants RBI wants to redto reduce the uce the inflation ratinflation rate, ae, a

weakening rupee is certainly not going to help it out.

Today, even the auditors of Jet Airways have asked the company to raise

funds in order to continue its operatio

funds in order to continue its operations in an efficient manner. Jet Airways has thens in an efficient manner. Jet Airways has the

biggest

biggest market market share share with with a a quarter quarter of of passengers passengers using using the the airlines. airlines. However, theHowever, the

Forex has

Forex has troubled troubled the the airline way airline way too mtoo much. Air uch. Air India, no India, no matter how matter how much debtmuch debt-

- ridden

ridden it it is, is, will will continue continue funding funding from from the the Central Central Government. Government. But But somethingsomething

needs to

needs to be be done done desperately desperately for for saving saving the the private private airline airline companies. They companies. They cannotcannot

groom

groom until until and and unless unless they they earn earn some some profits. profits. The The state state government, government, even even if if itit

reduces

reduces the the taxes taxes on on the the ATF, ATF, can can perform perform much much better better with with less less capital capital with with aa

better

better and and corruption-free corruption-free system. system. However, However, we we know know that that this this is is not not possible possible and and

the airlines are paying for it.

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Anyways,

Anyways, all all said said and and analysed, analysed, the the only only thing thing we, we, the the common common people, people, cancan

do

do is is hope hope that that the the airlines airlines do do get get some some relief relief from from the the government government in in the the form form of of

either tax reduction, or inclusion of Foreign Direct Investments. Air traffic in India

is growing at the rate of about 20-25% per quarter, and it will only hurt the

travellers

travellers of of they they have have to to pay pay higher higher prices prices for for a a journey journey because because of of a a lowlow

competition

competition caused caused by by the the shutting shutting down down of of companies/routes companies/routes due due to to excessiveexcessive

losses.

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RECOMMENDATION:-o

o To cut down debt kingfisher should sale out its property.To cut down debt kingfisher should sale out its property.

o

o We don’t support the bail We don’t support the bail -out plan from the Government for Kingfisher-out plan from the Government for Kingfisher

Airlines.

o

o Private Private sector sector players players must must not not be be supported supported by by the the Government Government for for theirtheir

Survival. This will spoil the competition between the private sector players.

It’s a free entry and exit.

It’s a free entry and exit. o

o Vijay Mallya of kingfisher airlines must sale-off its assets to minimise itsVijay Mallya of kingfisher airlines must sale-off its assets to minimise its

debts.

o

o The plan to raise more debt is completely a wrong idea and an unhealthyThe plan to raise more debt is completely a wrong idea and an unhealthy

plan.

o

o Demanding Demanding for for more more debts debts even even when when the the airline airline is is making making no no profits profits is is aa

wrong judgement or view. Airlines must not play with the money of investors

otherwise more adverse effect will be marked in the future.

(18)

CONCLUSION:- It

It has has been been very very glad glad to to work work on on this this research research oriented oriented wonderful wonderful project.project. The co-ordinated efforts of all the members had really made the project fantastic The co-ordinated efforts of all the members had really made the project fantastic and well-defined.

and well-defined.

The project is based on the Crisis of kingfisher airline and various other The project is based on the Crisis of kingfisher airline and various other aspects of it.

aspects of it.

Eventually

Eventually WE WE would would like like to to give give a a batch batch of of thanks thanks to to all all the the peoples peoples whowho have helped us in the making of this project.

(19)

BIBLIOGRAPHY:-

 http://en.http://en.wikipedia.orwikipedia.org/wiki/Kingg/wiki/Kingfisher_Airlinesfisher_Airlines

Kingfisher Project

http://w

http://www.mone

ww.moneycontr

ycontrol.com/ne

ol.com/news/curr

ws/current-affai

ent-affairs/kingf

rs/kingfisher-bo

isher-board-

ard- to-explo

to-explore-ways-

re-ways-outcrisi

outcrisis_6169

s_616953.html

53.html

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http://www.ti

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Economics Times Ne

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Times Of India Newspaper

Times Of India Newspaper