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| Founded | 2003 | |||
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| Commenced operations | 9 May 2005 | |||
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| Secondary hubs | ||||
| Focus cities | ||||
| Frequent-flyer program | King Club | |||
| Airport lounge | Kingfisher Lounge | |||
| Alliance | Oneworld (2012) | |||
| Subsidiaries | Kingfisher Xpress | |||
| Fleet size | 66 (+130 orders) | |||
| Destinations | 71[1] | |||
| Company slogan | Fly The Good Times | |||
| Parent company | United Breweries Group | |||
| Headquarters | Kingfisher House, Mumbai, Maharashtra[2] | |||
| Key people |
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| Website | flykingfisher.com | |||
Kingfisher Airlines is an airline group based in India. Its head office is Kingfisher House in Vile Parle (East), Mumbai.[3][4] 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.[5]
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[6] Kingfisher operates more than 375 daily flights to 71 destinations, with regional and long-haul international services.[1] In May 2009, Kingfisher Airlines carried more than 1 million passengers, giving it the highest market share among airlines in India.[7] Kingfisher also owns the Skytrax award for India's best airliner of the year 2011.
Kingfisher Airlines is also the sponsor of F1 racing outfit, Force India, which Vijay Mallya also owns.[8]
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.[9] It started its international operations on 3 September 2008 by connecting Bengaluru with London.
| Type | Public (BSE: KFA) |
|---|---|
| Industry | Transportation |
| Founded | 2003 |
| Headquarters | Mumbai, Maharashtra |
| Area served | Asia, Europe |
| Key people |
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| Services |
Airline catering & foodservice, aircraft ground handling and passenger transport |
| Revenue | 6,496 crore (US$1.23 billion) (2010-11)[10] |
| Subsidiaries | Kingfisher Xpress |
| Website | flykingfisher.com |
On 7 June 2010 Kingfisher became a member elect of the Oneworld airline alliance when it signed a formal membership agreement.
Kingfisher confirmed on the 20th December 2011 that it will join the Oneworld airline alliance on February 10th 2012. Kingfisher will be the first Indian carrier to join one of the big airline alliances. [11]
| Year ended | Passengers carried | % Change | Average load factor (%) |
|---|---|---|---|
| April 2007 – March 2008 | 12,414,336 | - | 61% |
| April 2008 – March 2009 | 10,850,359 | 12.6% | 60% |
| April 2009 – June 2009 | 2,851,360 | - | 69% |
Kingfisher Airlines serves 63 domestic destinations and 8 international destinations in 8 countries across Asia and Europe. Kingfisher's short haul routes are mostly domestic apart from some cities in South Asia, Southeast Asia and Western Asia. All short haul routes are operated on the Airbus A320 family aircraft. ATR 42s and ATR 72s are used mainly on domestic regional routes. Kingfisher has its medium, long-haul destinations in East Asia, Southeast Asia, and Europe. Its first long haul destination was London, United Kingdom which was launched in September 2008. It has plans to launch new long haul flights to cities in Africa, Asia, Europe, North America and Oceania with deliveries of new aircraft. All long haul routes are operated on the Airbus A330-200.
Kingfisher has codeshare agreements with:
Kingfisher Airlines' fleet currently consists of ATR 42, ATR 72 and Airbus A320 family aircraft for domestic and short haul services and Airbus A330-200s for international long-haul services. The average age of its fleet as of January 2009 was 2.3 years. All ATR's and a few aircraft from the A320 family are used for Kingfisher Red service.
Kingfisher's fleet consists of the following aircraft as of 15 August 2010:
| Aircraft | Total | Orders | Options | Passengers | Notes | ||
|---|---|---|---|---|---|---|---|
| P | Y | Total | |||||
| Airbus A319-100 | 3 | — | — | 0 | 144 | 144 | All dry-leased |
| Airbus A320-200 | 10 | 67 | — | 20 | 114 | 134 | 11 dry-leased Deliveries through to 2016 |
| 3 | 0 | 174 | 174 | ||||
| 10 | 0 | 180 | 180 | ||||
| Airbus A321-200 | 6 | — | — | 32 | 119 | 151 | 2 dry leased. |
| 2 | 0 | 199 | 199 | ||||
| Airbus A330-200 | 5 | 15 | — | 30 | 187 | 217 | Deliveries through 2015 |
| Airbus A350-800 | — | 5 | — | TBA | Deliveries starting 2015 | ||
| Airbus A380-800 | — | 5 | 5 | 0 | 0 | 644 | Deliveries starting 2014 |
| ATR 42-500 | 2 | — | — | 0 | 48 | 48 | All dry leased |
| ATR 72-500 | 17 | 38 | 20 | 0 | 66 | 66 | 15 new aircraft to be dry leased |
| 8 | 0 | 72 | 72 | ||||
| Total | 66 | 130 | 25 | ||||
On 21 July 2004, it signed a MoU with Airbus for four A320-200s with options for eight more. The first four A320-200s were leased from debis airfinance.
On 23 February 2005, it signed a contract with Airbus for three Airbus A319-100s and firm orders for ten A320-200s with options for twenty more.[16] On 25 April 2005, it took the delivery of its first Airbus A320-200 aircraft[17] which was used to start operations in 9 May 2005.
On 15 June 2005, it created history by becoming the first Indian airline to place orders for the Airbus A330, Airbus A350 and Airbus A380 aircraft. The order was for five A330-200s, five A350-800s and five A380-800s.[18]
On 21 November 2005, it placed another order for thirty Airbus A320 family aircraft.[19]
On 24 April 2006 at Hannover, it became the first Indian airline yet again to place orders for the Airbus A340 aircraft. The order was for five A340-500s.[20] However, these A340-500 orders were cancelled in 2008 due to worldwide economic recession which resulted in skyrocketing of petroleum prices across the world in July 2008.
On 20 June 2007 at the 2007 Paris Airshow, it signed a MoU with Airbus for twenty Airbus A320 family aircraft, ten Airbus A330-200s, five Airbus A340-500s and fifteen Airbus A350-800s.[21] The order for five A340-500s were converted to A330-200s in 2008 after the cancellation of the initial five A340-500 order which was placed in April 2006 at Hannover.
On 14 July 2008, Kingfisher unveiled its first ever Wide-body aircraft, a Airbus A330-200 (registered VT-VJL) at the 46th Farnborough Airshow held in July 2008. Kingfisher's first Airbus A330-200 was widely billed (according to the airline's press release) as the best A330-200 ever built by Airbus.[22]
| Aircraft | 2012 | 2013 | 2014 | 2015 | 2016 | Total |
|---|---|---|---|---|---|---|
| Airbus A320 family | 6 | 9 | 7 | 8 | 12 | 42 |
| Airbus A330-200 | 4 | 3 | 4 | 4 | – | 15 |
| Airbus A350-800/A380-800 | – | – | 12 | 6 | 12 | 30 |
| Total | 10 | 12 | 23 | 18 | 24 | 87 |
The domestic Kingfisher First seats have a 48 inch seat pitch and a 126 degree seat recline. There are laptop and mobile phone chargers on every seat. Passengers can avail of the latest international newspapers and magazines. There is also a steam ironing service on board Kingfisher First cabins. Every seat is equipped with a personalised IFE system with AVOD which offers a wide range of Hollywood and Bollywood movies, English and Hindi TV programmes, 16 live TV channels and 10 channels of Kingfisher Radio. Passengers also get BOSE noise cancellation headphones.
Domestic Kingfisher First is only available on selected Airbus A320 family aircraft.
The domestic Kingfisher Class has 32-34 inch seat pitch.
Every seat is equipped with personal IFE systems with AVOD on-board the Airbus A320 family aircraft. As in Kingfisher First, passengers can access movies, English and Hindi TV programmes, a few live TV channels powered by DishTV, and Kingfisher Radio. The screen is controlled by a controller-console on the seat armrest. Earcup headphones are provided free of cost to all passengers. The default channel shows, alternating every few seconds, the aeroplane's ground speed, outside temperature, altitude, distance and time to destination, the position of the aircraft on a graphical map, and one or more advertisements.
Passengers are served meals on most flights. Before take-off, passengers are served bottled lemonade.
After Kingfisher Airlines acquired Air Deccan, its name was changed to Simplifly Deccan and subsequently to Kingfisher Red. Kingfisher Red is Kingfisher Airline's low-cost class on domestic routes. A special edition of Cine Blitz magazine is the only reading material provided.
Kingfisher Airlines is the first airline in India to extend its King Club frequent flyer program to its low-cost carrier as well. Passengers can earn King Miles even when they fly Kingfisher Red, which they can redeem for free tickets to travel on Kingfisher Airlines or partner airlines.
The international Kingfisher First has full flat-bed seats with a 180 degree recline, with a seat pitch of 78 inches, and a seat width of 20-24.54 inches.[24] Passengers are given Merino wool blankets, a Salvatore Ferragamo toiletry kit, a pyjama to change into, five-course meals and alcoholic beverages. Also available are in-seat massagers, chargers and USB connectors.
Every Kingfisher First seat has a 17 inch widescreen personal television with AVOD touchscreen controls and offers 357 hours of programming content spread over 36 channels, including Hollywood and Bollywood movies along with 16 channels of live TV, so passengers can watch their favorite TV programmes live. There is 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 includes 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 includes the conversion of the seat into a fully flat bed and an air-hostess making the bed when the passenger is ready to sleep.
Both Kingfisher First and Kingfisher classes feature mood lighting on the Airbus A330-200 with light schemes corresponding to the time of day and flight position.
The international Kingfisher Class seats offer a seat pitch of 34 inches, a seat width of 18 inches and a seat recline of 25 degrees (6 inches). Passengers get full length modacrylic blankets, full size pillows and meals.
Each Kingfisher Class seat has a 10.6 inch widescreen personal television with AVOD touchscreen controls. The IFE is similar to that of the international Kingfisher First class. It can also be controlled by a detachable remote-control console fitted in the armrest. This device can be used to control the IFE, reading-lights, play games and even has a credit-card swipe for shopping on Kingfisher's 'Air Boutique'. It also has a facility for sending text-messages, though the service isn't provided by Kingfisher.
Kingfisher's IFE system is the Thales TopSeries i3000/i4000 on-board the Airbus A320 family aircraft, and Thales TopSeries i5000 on-board the Airbus A330 family aircraft provided by the France-based Thales Group.[25]
Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights. All passengers were given a "welcome kit" consisting of goodies such as a pen, facial tissue and headphones to use with the IFE system. Now, passengers of Kingfisher class are not given "welcome kits" but, as mentioned earlier, a complimentary bottle of lemonade and earphones for use with the IFE are still given. Initially, passengers were able to watch only recorded TV programming on the IFE system, but later an alliance was formed with Dish TV to provide live TV in-flight.[26] And in a marked departure from tradition, Kingfisher Airlines decided to have an on-screen safety demonstration using the IFE system; however the conventional safety briefing by the flight attendants still exists on many flights.
The Frequent-flyer program of Kingfisher Airlines is called the King Club in which members earn King Miles every time they fly with Kingfisher or its partner airlines, hotels, car rental, finance and lifestyle businesses. There are four levels in the scheme: Red, Silver,Gold and Platinum levels. Members can redeem points for over a number of schemes. Platinum, Gold and Silver members enjoy access to the Kingfisher Lounge, priority check-in, excess baggage allowance, bonus miles, and 3 Kingfisher First upgrade vouchers for Gold membership. Platinum members get 5 upgrade vouchers.
Kingfisher Lounges are offered to Kingfisher First passengers, along with King Club Silver and King Club Gold members. Lounges are located in:
Accoding to Kingfisher[27]
Since inception, Kingfisher Airlines is yet to post profit on annual & total cost basis.[30] Following are YoY financial results of Kingfisher Airlines, all numbers are in Indian rupee (INR) crore except EPS, which is in INR.[31]
| # | From | To | Months | Total Income | Cost | Net Profit | EPS |
|---|---|---|---|---|---|---|---|
| 01 | Apr-05 | Jun-06 | 15 | 1,352 | 1,689 | -337 | -68 |
| 02 | Jul-06 | Jun-07 | 12 | 2,142 | 2,562 | -420 | -42 |
| 03 | Jul-07 | Mar-08 | 09 | 1,546 | 1,734 | -188 | -11 |
| 04 | Apr-08 | Mar-09 | 12 | 5,577 | 7,186 | -1,609 | -55 |
| 05 | Apr-09 | Mar-10 | 12 | 5,271 | 6,918 | -1,647 | -54 |
| 06 | Apr-10 | Mar-11 | 12 | 6,496 | 7,523 | -1,027 | -16 |
| 07 | Apr-11 | Sep-11 | 06 | 3,410 | 4,142 | -732 | n/a |
| Total | 78 | 25,793 | 31,754 | -5,960 |
In Nov 2010, Kingfisher Airlines has completed restructuring 8,000 crore (US$1.52 billion) debt, with all 18 lenders agreeing to cut interest rates and convert part of loans to equity.[32]
Lenders have converted 650 crore (US$123.5 million) debt into preference shares which will be converted into equity when the airline lists on the Luxembourg Stock Exchange by selling global depositary receipts (GDR). Shares will be converted into ordinary equity at the price at which the GDRs are sold to investors. Besides the 1,400 crore (US$266 million) debt which will be converted into preference shares, another 800 crore (US$152 million) debt has been converted into redeemable shares for 12 years.[32]
Airline's average interest rate is now down to 11%, helping the airline save 500 crore (US$95 million) crore every year on interest cost. Consortium of banks was represented by SBI Capital Markets.
Kingfisher Airlines Ltd has informed BSE that the Board of Directors of the Company at its meeting held on November 25, 2010, has approved a Debt Recast Package (DRP) with lending banks, following a one-time relaxation in restructuring guidelines sanctioned by the Reserve Bank of India. The salient features of the DRP include:
While Board sanction has been received from several lenders, the same is shortly expected from the others. The DRP is subject to execution of necessary documentation.
In order to give effect to the DRP mentioned above, the Board of Directors at its Meeting held on November 25, 2010, has resolved as follows, subject to the above approvals and subject to the approval of the shareholders and such other regulatory and other approvals as may be required[32]:
Kingfisher Airlines, in Nov 2011 was attempting for a second debt recast. However second debt recast has been ruled out by Government of India. Minister of state for Finance made a statement on 09th Dec 2011.[33]
Kingfisher Airlines has pledged its brand as collateral with its lender consortium for 4,100 crore (US$779 million). The brand valuation was done by Grant Thorton in 2010.[33] Reportedly the Brand has been valued and loan raised worth triple carrier’s market value.[34]
On July 6, 2011, pursuant to requirements prescribed under the Debt Recast Package Kingfisher Airlines' founder companies, United Breweries (Holdings) Ltd and Kingfisher Finvest Ltd, have pledged their entire stake in the airline with certain of its lenders.[35]
United Breweries (Holdings) Ltd held 199,598,555 shares (representing 40.1% of total outstanding shares) in the airline and has pledged all the shares to lenders. At the same time, Kingfisher Finvest Ltd held 63,478,570 shares (representing 12.75% of total outstanding shares) has pledged it's entire holding to the lenders.[36]
Kingfisher Airline has staff strength of 6,000 and spends 58 crore (US$11.02 million) on salaries a month. According to the first quarter financial results, it has 173.66 crore (US$33 million) under the employees cost head, which has increased from 163.40 crore (US$31.05 million) during the same quarter last year.
Kingfisher Airlines has delayed salaries (for Jul 2011) of its employees in Aug 2011. The management stated that it does not have the money, and has not given any date for the payment. Kingfisher airline had earlier stated that due to the bank strike, the salaries could not be processed.
Employees were paid salaries on the 7th of every month. Earlier, the company used to pay on the 31st.[37]
In the month of Oct 2011, salary payment for the month of Sep 2011 had been delayed by Kingfisher Airlines. 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 company deducted from the salaries wasn’t being paid to the tax department.[38]
Kingfiher airline could not pay salaries (on time) to it staff in the month of November 2011.[39]
The airline could not pay salaries to it staff for the month of December 2011. In protest, Kingfisher pilots started making in-flight announcements citing "It is their sense of duty towards the guest that is making them fly despite not being paid salaries for the past two months".[40] Pilots have also said that they plan to wear black armbands while reporting for work.
Since 2008, it has been reported that Kingfisher Airlines has been unable to pay the aircraft lease rentals on time.
In a written reply to the Rajya Sabha, Civil Aviation Minister Vayalar Ravi informed that Kingfisher Airlines did not settle dues on a regular fortnightly basis and that their exceeded the security deposit / bank guarantees available with AAI. As per the details provided, as on June 30, 2011, Kingfisher Airlines owes 208.06 crore (US$39.53 million).[48]
In Sep 2011, the Chairman & Managing Director of Kingfisher Airlines made following disclosure to BSE;
The Company has incurred substantial losses and its net worth has been eroded. However, having regard to improvement in the economic sentiment, rationalization measures adopted by the Company, fleet recovery and the implementation of the debt recast package with the lenders and promoters including conversion of debt into share capital, these interim financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities"[49]
This filing was widely covered by Indian and international print and electronic media and analysts. It was stated by analysts and media that the company needs capital infusion to remain viable and this has pushed shares to near historic lows.[50] Kingfisher Airlines Lenders later stated that they consider that company is viable.[51]
On 15 November 2011 the airline released poor financial results, indicating that it was "drowning in high-interest debt and losing money". Mallya indicated that his solution was for the government to reduce fuel and other taxes. The government was engaged in assessing whether to bail out the company and other airlines or let market forces determine which ones survive.[52]
In December 2011, for the second time in two months, Kingfisher's bank accounts were been frozen by the Mumbai Service Tax department for non-payment of dues. Kingfisher Airlines owes 70 crore (US$13.3 million) to the service tax department.[53] Indian tax body also stated that Kingfisher Airlines is delinquent[54]
As response, Dr. Vijay Mallya called on the Chairman of Central Board of Excise and Customs and offered to pay up the dues by 13 Dec 11[55]
Kingfisher bank accounts were unfrozen on 14th Dec 11.[56]
On 9 December 2011, S.K. Goel, chairman, Central Board of Excise and Customs (CBEC) announced that CBEC is considering legal action against Kingfisher for not paying service tax.[33]
Due non-payment, several Kingfisher's vendors had filed winding up petition with the High Court. As on Nov 2011, winding up petition of seven creditors was pending before the Bangalore High Court.[57] In the past Lufthansa Technik & Bharat Petroleum Corporation Limited (BPCL) had also filed winding up petition against Kingfisher Airlines[58]
Kingfisher Airlines, for the financial year 2010-2011 & 2011-2012 had not deposited 153 crore (US$29.07 million) TDS (Tax deducted at source), that the company deducted from its employees.[59]
Minister of State for Finance S S Palanimanickam advised the Rajya Sabha that proceedings have been initiated for FY 2010-2011 to crystallize the default amount, levy interest on delayed payment and take further statutory action.[60]
Kingfisher Airlines has grounded 15 out of 66 aircraft in its fleet as it was unable to meet the maintenance and overhaul expenses.[61]
Kingfisher Airlines had not paid some bankers (Lenders) as per the Debt Recast Package (DRP) with lending banks. Till the end of Dec 2011, the arrears were estimated to be 260 crore (US$49.4 million) to 280 crore (US$53.2 million). Lenders hence had told Kingfisher Airlines to clear its dues before they can release any more money sought by the Airline. Ravi Nedungadi, chief financial officer of UB Group however said that the arrears were 180 crore (US$34.2 million).[62]
If arrears were not paid in time (Dec 2011); Kingfisher Airlines would automatically have been treated as NPA, (Non-performing asset).[63]
On the last working day of the third quarter of financial year 2011-2012, Kingfisher Airlines made one month interest amount to the banks; thus saving the account from turning a non-performing asset[64]
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