Kingfisher Airlines

Kingfisher Airlines is an airline group based in India. Its head office is The Qube in Andheri (East), Mumbai and Registered Office in UB City, Bangalore. Kingfisher Airlines, through its parent company United Breweries Group, has a 50% stake in low-cost carrier Kingfisher Red. The airline has been facing financial issues for many years. Until December 2011, Kingfisher Airlines had the second largest share in India's domestic air travel market. However due to the severe financial crisis faced by the airline, it has the fifth largest market share currently, only above Go Air. Kingfisher Airlines is one of the only seven airlines awarded 5-star rating by Skytrax along with Cathay Pacific, Qatar Airways, Asiana Airlines, Malaysia Airlines, Singapore Airlines, and Hainan Airlines Kingfisher operates 250 daily flights with regional and long-haul international services. In May 2009, Kingfisher Airlines carried more than 1 million passengers, giving it the highest market share among airlines in India. Kingfisher also owns the Skytrax award for India's best airline of the year 2011.Kingfisher Airlines is also the sponsor of F1 racing outfit, Force India, which Vijay Mallya also owns. 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 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 Indian carrier struggling with losses and a cash shortage, had fuel supplies suspended overnight after failing to pay bills. Hindustan Petroleum Corp. resumed the supply today after resolving issues over fuel bill dues, S. Ramaswamy, its spokesman, said without elaboration. Indias third-largest state refiner stopped supplying Kingfisher yesterday evening, B. Mukherjee, its finance director, said earlier today. Kingfisher spokesman Prakash Mirpuri didnt answer three calls to his mobile phone seeking comments. Kingfisher Airlines Ltd., the Indian carrier struggling with losses and a cash shortage, had fuel supplies suspended overnight after failing to pay bills. Photographer: Dhiraj Singh/Bloomberg Feb. 21 (Bloomberg) -- Kingfisher Airlines Ltd., the Indian carrier struggling with a cash shortage, slumped the most in more than three years in Mumbai trading after tax authorities froze bank accounts forcing it to cancel flights. Linzie Janis and Owen Thomas report on Bloomberg Television's "Countdown." (Source: Bloomberg)

Vijay Mallya, chairman of Kingfisher Airlines Ltd. The carrier, controlled by Mallya, owes more than 4.25 billion rupees ($85 million) to Hindustan Petroleum, its biggest supplier. Photographer: Adeel Halim/Bloomberg The International Air Transport Association also yesterday said it had suspended Bangalorebased Kingfisher from a clearing system because of overdue payments. The airline, unprofitable for more than 10 than straight quarters, said that payment disruption was caused by a freeze on its bank accounts by Indias tax authorities. The carrier, controlled by billionaire Vijay Mallya, owes more than 4.25 billion rupees ($85 million) to Hindustan Petroleum, its biggest supplier, press trust of India reported yesterday, citing an official at the refiner it didnt identify. Kingfisher has also failed to pay staff, cut flights and taken planes out of service because of cash shortages and accounts being frozen by tax authorities. It this week said Chief Executive Officer Sanjay Aggarwal had asked pilots to continue working and pledged to pay salaries as soon as possible. The carrier fell 6.7 percent, the most since Nov. 29, to 21.05 rupees yesterday in Mumbai trading. Markets are closed in India today on account of a holiday. Kingfisher said yesterday that it is working to free its frozen bank accounts shortly and will resume payments to the IATA system once that is done. The IATA facility allows airlines to settle dues to other operators for carrying passengers and freight. The airline industry group said the carriers participation in the IATA Clearing House will be reinstated after it meets ICH requirements. Kingfisher said Feb. 3 that an internal system failure had disrupted payment and triggered a suspension from ICH. The carrier said then it had clear all payments and was expecting a reversal of the halt. Yesterdays IATA statement didnt say whether the group had reversed the previous suspension. More than 450 airlines and associates use the clearing system, according to the groups website. NEW DELHI: Kingfisher Airlines said it had to cancel some flights due to "employee agitation on account of delayed salaries", pushing the debt-laden carrier deeper into trouble.The airline said it was operating about 80 percent of its flights, implying that only 160 flights are being flown, compared with 400 six months ago.Many of Kingfisher's pilots called in sick at various places around the country to protest against delayed salaries, local media reported. Kingfisher Airlines, headed by liquor tycoon Vijay Mallya and named after his famous brand of Indian beer, has been struggling to continue its normal operations as a heavy debt load, higher jet

fuel costs, stiff competition and low fares severely hurt its ability to raise funds.It was suspended from three settlement systems of the International Air Transport Association (IATA) last week, hurting the airline's ability to deal with global airlines and travel agents. "The flight loads have reduced because of our limited distribution ability caused by the IATA suspension," Kingfisher said in a statement on Monday."This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities. We are making all possible efforts to remedy this temporary situation," the airline said. Kingfishers bank accounts were frozen last month over outstanding dues. According to local media, Kingfisher was also issued a "show-cause" notice last week, asking it to explain why it had not paid about 3 billion rupees of tax. Kingfisher, which has a debt of about $1.3 billion, needs at least $400 million soon to keep flying, according to the Centre for Asia Pacific Aviation, an industry consultancy. Its lessons have started cancelling leases for planes, and the aircraft Kingfisher owns are mostly pledged with lenders. An uncertain future and delayed salaries have also driven away about 300 pilots and a few hundred other staff to rivals in recent months. At 0626 GMT, Kingfisher shares, valued at about $210 million, were up 0.71 percent at 21.15 rupees. The BSE Sensex was 0.67 percent up. The shares have lost about 57 percent of their value since last April, while the Sensex has lost 8.5 percent. Questions:

Why is Kingfisher Airlines constantly losing money?

References: http://timesofindia.indiatimes.com/business/india-business/Kingfisher-cancels-dozens-of-flightsas-pilots-stay-away-from-work/articleshow/12232406.cms http://ibnlive.in.com/news/kingfisher-crisis-worsens-oil-firms-stop-fuel-supply/237081-7.html http://en.wikipedia.org/wiki/Kingfisher_Airlines http://www.bloomberg.com/news/2012-03-08/kingfisher-airlines-crisis-deepens-as-fuel-supplieshalted-for-non-payment.html