What started as a collaboration and investment by Kingfisher Airlines in Air Deccan soon turned into a merger of the two

in 2007, followed by two rebranding exercises with which Air Deccan, India's first lowcost carrier, metamorphosed into Kingfisher Red. On September 28 this year, Kingfisher Red was awarded the death sentence. 28 sept 2011: Cash-strapped tycoon Vijay Mallya on Wednesday announced exiting low-cost airline Kingfisher Red and raising about Rs 2,000 crore ($400 million) through a rights issue to improve the beleagueredcompany's cashflow. The
shareholders unanimously approved the company's rights issue to raise Rs 2,000 crore. Though a general depository receipts (GDR) issue was approved in the past, the company could not float it due to unfavourable external factors such as high crude oil prices.

Asserting that the margins of Kingfisher Class were better as its yields were higher than the low-cost operations, Mallya earlier told the shareholders that he was exiting Kingfisher Red as it did not make sense to compete in the budget segment. Kingfisher, holds a 18.8 per share of the domestic market, also announced it would reduce the number of business class seats on many of the aircraft on its full-service fleet and add seats to the economy section. The airline claims the two moves will increase its capacity by around 10 per cent. total debt burden of around Rs 5,500 crore. In April 2011, it allotted around 11 per cent stake to State Bank of India and ICICI Bank in a debt restructuring exercise. first quarter results for the current financial year showed net sales increasing by 14.7 per cent to Rs 1,881.64 crore, its losses continued to mount. The loss for the first quarter was Rs 263.54 crore against Rs 187.35 crore in the same period last year. Kingfisher has attributed the decline to the rise in the price of aviation turbine fuel.

Plummeting Airlines
Reasons for downfall of KFA . . . . . .

Kingfisher's curious decision to close Kingfisher Red comes at a time when low-cost carriers are doing better than ever before, having captured 45.5 per cent of the Indian market. While Kingfisher has been losing money, IndiGo reported an 18 per cent increase in profits for 2010/11 on the back of a 42 per cent rise in revenue. SpiceJet's profit for the same year was Rs 101.16 crore, up 64.6 per cent. Market leader Jet Airways has said it plans to increase its domestic low-fare capacity to 80 to 85 per cent of its total fleet, from 72 per cent. Kingfisher Airlines, the second-largest carrier by market share in India NOVEMBER 2011 Even the 40 flight cancellations over last few days have come on the back of nearly 100 pilots having exited the airline over the last few months and its fast-mounting dues with airport companies and oil companies. The airline's peers, too, are not doing well. Jet Airways posted a loss of Rs 713 crore for the June to September period, as compared to a profit of Rs 12 core for the same period last year. Meanwhile, SpiceJet has reported a loss of Rs 240 crore for June to September compared to Rs 10 core profit in the same period last year. Both the airlines have attributed the loss to depreciation of the rupee, higher fuel prices, and some 'irrational' -read low- prices from Air India. But Kingfisher's troubles are graver. The airline which started operations in 2005 hasn't reported a profit ever. What is also worrisome is that a bulk of the airline's Rs 6,000 crore debts are on account of operating losses and only some of it is due to the merger with the loss-making Air Deccan that Kingfisher took over in 2007. This is much unlike the big-ticket aircraft acquisitions which are behind the bulging debts of Jet Airways and Air India, which the airlines can use as assets if need be.

Kingfisher had cut its debt through a restructuring by issuing shares to 14 banks, including State Bank of India and ICICI Bank. According to the plan, a consortium of 13 banks converted a Rs 750 crore loan into 23.37 per cent equity in the airline, valuing its shares at a nearly 62 per cent premium over the prevailing market price. That apart the airline is looking to raise funds via a Global Depository Receipt issue, and convert some of its part of its rupee loans into low-cost foreign currency loans. It is estimated that jet fuel costs are almost 50 per cent of the total operating expenses of the airline. Though Kingfisher has never reported profit and has accumulated debt of Rs 6,500 crore, it has been outperforming competition both on EBITDA and EBITDAR basis in five of the last six quarters. We have a genuine need for working capital increase

For which Malaya has asked banks to extend financial support of Rs.600-700 Cr

Following a spate of cancelled flights over successive days at Kingfisher Airlines, debt of Rs 7,500 crore and mounting, a July-September quarter loss of Rs 469 crore, delayed salaries, a churn among pilots quitting, and rumours of lessors wanting to repossess planes, its Chairman Vijay Mallya held a press briefing on November 15 in Mumbai .

Kingfisher's net loss shot up to Rs 444.26 crore for the quarter ending December 31, 2011 from Rs 253.69 crore in the October-December quarter of the previous fiscal. It has suffered a loss of Rs 1,027 crore in 2010-11 DECEMBER 2011 Kingfisher Airlines, the Vijay Mallya owned cash-strapped airline, reported a 75 per cent wider net loss at Rs 444.26 crore for the quarter ended December 31, 2011, due to high fuel costs, a weaker rupee and fierce competition. Kingfisher's Future & Options Route rationalisation: Cutting back unprofi table sectors and services to several cities Debt recast: Asking banks to reduce rates or take a cut on loans or find a 'local investor' Raising capital: It has plans to raise $200 million through GDR FDI: If the FDI limit is raised and foreign airlines are allowed to buy a stake, Mallya could recapitalise Kingfisher

The troubles of cash-strapped Kingfisher Airlines worsened on Friday with another lender classifying its loan to the Vijay Mallya-promoted company as "sub-standard", a day after State Bank termed the airline as defaulter. Constant threat of accounts being frozen due to non payment of taxes charged to customers as service tax (Paid 10 cr arrears for the period of Apr-Nov) Only 16 out of the airlines fleet of 64 aircraft are flying FEBURARY 2012 Excise authorities have frozen the bank account of the carrier for its failure to pay service tax dues of about Rs 35 crore. "They were supposed to clear their arrears by paying certain amount. They had agreed to pay Rs 1 crore every day," Chairman of the Central Board of Excise and Customs (CBEC) S K Goel said at a function to mark the Central Excise Day. But the airline has not been paying for the past few days. "So we have frozen their accounts 2-3 days ago by issuing a letter to the bank," he said. Kingfisher had service tax dues of about Rs 70 crore as of November 2011 and the company had promised the tax authorities to clear them in installments, he

said. "They have paid about Rs 35 crore upto now. Nearly half (of the dues) they have paid, half is still arrears," the CBEC chief said The government-owned State Bank of India (SBI) threw a Rs 1,500-crore lifeline on Tuesday to keep billionaire Vijay Mallya 's sinking Kingfisher Airlines afloat in a move that amounts to throwing good money after bad. The income tax department also softened its stand and unfroze the airline's bank accounts as part of the bailout package for the loss-making carrier. The government-owned State Bank of India (SBI) threw a Rs 1,500-crore lifeline on Tuesday to keep billionaire Vijay Mallya 's sinking Kingfisher Airlines afloat in a move that amounts to throwing good money after bad. The income tax department also softened its stand and unfroze the airline's bank accounts as part of the bailout package for the loss-making carrier. Additionally, Rs 500 crore will be provided as bank guarantees. Loans worth Rs 200 crore, coming up for repayment shortly, will be rolled over. Further, Rs 150 crore will be provided as guarantees to the income tax department. The mechanics are unclear whether the latest SBI bailout includes any equity shareholding transfer by Kingfisher. SBI's exposure to Kingfisher Airlines is now Rs 1,457 crore, plus Rs 182 crore (equity), plus Rs 1,500 crore (fresh bailout). This adds up to over Rs 3,100 crore After a sharp plunge of 20 per cent in its share price earlier in the day, crisisridden Kingfisher Airlines on Wednesday (21st feb) bounced back smartly on the bourses and its stock managed to settle with a modest gain. Threat of license being cancelled. Ajit Singh, Aviation Minister says license cant be cancelled as long as KFA has min 5 planes operational and certain amount of equity.(Currently KFA has on 16 operational out of the previously 64 owned planes) total debt of about Rs 7,057 crore and accumulated losses of about Rs 6,000 crore. KFA has decided to suspend all international flights from March 25 and further curtail domestic operations. The airline, which was operating over 400 daily flights 64 aircraft in its winter schedule, slashed it to 170 flights with 28 aircraft last month. On Sunday, this was reduced to 130 daily flights. Cash-strapped Kingfisher Airlines has to pay Rs 40 crore ($8 million) dues in indirect taxes by March 31, Central Board of Excise and Customs (CBEC) Chairman S K Goel