Your project should include following points:-

i) A brief introduction about the companies those are merged/acquired –

Kingfisher Airlines Ltd –

Kingfisher Airlines was established in 2003. It was owned by the Bengaluru based United Breweries
Group. The airline started commercial operations on 9 May 2005 with a fleet of four new Airbus A320-
200s operating a flight from Mumbai to Delhi. It started its international operations on 3 September
2008 by connecting Bengaluru with London.

The airline's first long-haul destination was London, England, which was launched in September
2008. It had plans to launch long-haul flights to cities in Africa, Asia, Europe, North America and
Oceania with deliveries of new aircraft. All long-haul routes were operated on the Airbus A330-200.

On the day of suspension of all international operations, 10 April 2012, Kingfisher Airlines served 25
domestic destinations within India. At that time, all routes were operated with the Airbus A320 family,
ATR 42s and ATR 72 aircraft.

Kingfisher's head office was located in the Kingfisher House in Vile Parle (East), Mumbai,[8] but later
moved to The Qube in Andheri (East), Mumbai. Its registered office was located in UB City,
Bengaluru.

Domestic

Kingfisher First
The domestic Kingfisher First, offered on some Airbus A320 family aircraft only, provided seats with a
48-inch pitch and 126-degree recline. There were laptop and mobile phone chargers on every seat.
There was also a steam ironing service on board Kingfisher First cabins. Every seat was equipped
with a personalised IFE system with AVOD which offered a wide range
of Hollywood and Bollywood movies, English and Hindi TV programmes, 16 live TV channels and 10
channels of Kingfisher Radio.
Kingfisher Class
The domestic Kingfisher Class had 32-34 inch seat pitch. Every seat was equipped with
personal IFE systems with AVOD on board the Airbus A320 family aircraft. As in Kingfisher First,
passengers could access movies, English and Hindi TV programmes, a few live TV channels
powered by DishTV, and Kingfisher Radio. Passengers were served meals on most flights. Before
take-off, passengers were served bottled lemonade.

International

Kingfisher First
Kingfisher offered an international business/first product called Kingfisher First which featured full flat-
bed seats with 180-degree recline, pitch of 78 inches and width of 20-24.54 inches.[34] Passengers
were given Merino wool blankets, a Salvatore Ferragamo toiletry kit, pyjamas, five-course meals and
alcoholic beverages. Also available were in-seat massagers, chargers and USB connectors. Every
Kingfisher First seat had a 17-inch widescreen personal television with AVOD touchscreen controls
and offered 357 hours of programming content spread over 36 channels,
including Hollywood and Bollywood movies along with 16 channels of live TV, so passengers could
watch their favorite TV programmes live. There was also a collection of interactive games, a jukebox
with customisable playlists and Kingfisher Radio. Passengers are given BOSE noise cancellation
headphones. The service on board the Kingfisher First cabins included a social area comprising a full-
fledged bar staffed with a bartender, a break-out seating area just nearby fitted with two couches and
bar stools, a full-fledged chef on board the aircraft and any-time dining. A turn-down service included
the conversion of the seat into a fully flat bed and an air-hostess making the bed when the passenger
is ready to sleep.
Kingfisher Class
The international Kingfisher Class seats offered a pitch of 34 inches, width of 18 inches and recline of
25 degrees (6 inches). Passengers received full-length modacrylic blankets and full-size pillows. Each
Kingfisher Class seat had a 10.6 inch widescreen personal television with AVOD touchscreen
controls. The IFE was similar to that of the international Kingfisher First class.

Cargo
Kingfisher Xpress
Kingfisher Xpress was a Door-to-Door cargo delivery service launched in February 2010, being the
first such service in India promising same-day pick-up in Mumbai, New Delhi, Bangalore, Hyderabad,
Chennai and Kolkata and delivery in up to 18 cities, namely, Bagdogra, Bangalore, Chennai,
Coimbatore, Delhi, Kochi, Goa, Guwahati, Hyderabad, Indore, Kolkata, Mumbai, Raipur, Ranchi,
Lucknow, Nagpur, Pune and Srinagar. A money-back guarantee was offered.

Kingfisher Lounge[edit]
Kingfisher Lounges were offered to Kingfisher First passengers, along with King Club Silver and King
Club Gold members. Lounges were located in:

 Kempegowda International Airport (Bangalore)

 Chennai International Airport
 Chhatrapati Shivaji International Airport (Mumbai)
 Cochin International Airport (Kochi)
 Indira Gandhi International Airport (Delhi)
 London Heathrow Airport
 Netaji Subhash Chandra Bose International Airport (Kolkata)
 Rajiv Gandhi International Airport (Hyderabad)

Air Deccan is India’s first LCC. It was founded and operated by Deccan Aviation Ltd. by Captain
Gopinath in 2003 with regular scheduled flights from Bangalore to Mangalore and Hubli. When it
started its operations, Deccan was known popularly as the common man's airlines. Air Deccan
triggered price wars in the Indian Skies which forced other players to match Air Deccan’s prices. The
consumers benefited while carriers lost. Air Deccan gained market share but at the cost of
profitability.
ii) Reason for Merger/Acquisition –
iii) About the deal (the value and Valuation method, the consultants involved, the price
paid, any other details known) –

In 2007, Kingfisher Airlines acquired a 26% equity stake in Air Deccan and became the largest single
shareholder in Deccan Aviation Ltd. It was agreed that Kingfisher would continue to serve the
corporate and business travel while Air Deccan would focus on serving the low fare segment but with
improved financial prospects for both carriers.

Kingfisher later increased its stake to 46%, and took control of the management of Air Deccan,
upgrading it to a value-based airline with higher airfare and repositioned it as 'Simplifly Deccan'.

Air Deccan airlines merged with Kingfisher Airlines and decided to operate as a single entity from
April, 2008. Following the merger of Deccan with Kingfisher, in August 2008, Kingfisher renamed
Deccan as Kingfisher Red. After the merger, the company has a combined fleet of 71 aircrafts,
connects 70 destinations and operates 550 flights in a day. The combined entity has a market share
of 33%.

Consultants involved - N M Rothschild consultants who brokered the deal

On Thursday, the board of Air Deccan issued in-principle approval for UB Holdings to invest up to
26% in the low-cost carrier. UB will spend Rs 550 cr.
iv) Synergies and Integration –

Operational Synergies

Infrastructure Synergy

Route Synergy

Investment Synergy
v) Problems/Challenges faced –

It is a venture that has proved to be costly. Removing Air Deccan as an independent operator took out
the airline that was most responsible for the irrational fares in the market place and, to this extent, it
restored some pricing discipline which advantaged the entire industry.

However, integrating such different carriers (one, a classic low cost airline and the other a 5 star
carrier), has proven to be extremely difficult. The huge combined network and distinct inflight products
of the two carriers, has created duplication and confusion about the brand. This has been damaging
to Kingfisher, with repercussions for its financial performance. The combined entity today has a large
network and diverse operations that are proving to be hard to manage.
vi) The Final Outcome (was it a failure or a success) – Failure

The acquisition of loss-making Bangalore-based Air Deccan in 2007 made matters worse. It was
believed that Vijay Mallya and his team failed to do due diligence on the airline and that it was this
deal that brought down his empire; courtesy of N M Rothschild consultants who brokered the deal. An
initial name change to Simplifly Deccan, followed by Kingfisher Red, and promotion as the domestic
budget Kingfisher airline failed to stem losses and Kingfisher suffered a loss of over ₹10 billion
(US$140 million) for three consecutive years.

On 28 September 2011, Vijay Mallya announced that the company would soon stop operations of
Kingfisher Red as it did not believe in low-cost operations any longer.
vii) The future plan

In December 2011, for the second time in two months, Kingfisher's bank accounts were frozen by the
Mumbai Income Tax department for non-payment of dues. It owed ₹700 million (US$9.7 million) to the
service tax department at the time.

By early 2012, the airline accumulated losses of over ₹70 billion (US$970 million) with half of its fleet
grounded and several members of its staff going on strike. Kingfisher's position in top Indian airlines
on the basis of market share had slipped to last from 2 because of the crisis. Mallya was looking for
buyers for the Vile Parle Kingfisher House. With the freezing of the bank accounts of the airline by the
Indian Income Tax Department, the airline was in financial disarray.

On 20 October 2012, Kingfisher's licence was suspended by the Directorate General of Civil Aviation
after it failed to address the Indian regulator's concerns about its operations. On 25 February 2013, its
international flying rights and domestic slots were scrapped by the Indian aviation authorities.

Ironically, until December 2011, Kingfisher Airlines had the second largest share in India's domestic
air travel market. However, the airline ran into continuous losses since its inception, ran high debts
and finally closed its operations in 2012. Its chairman Vijay Mallya subsequently fled to London to
hide from creditors and the people of India.