INTRODUCTION

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 more than 375 daily flights to 71destinations, 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 airliner of the year 2011. Kingfisher Airlines is also the sponsor of F1 racing outfit,Force India, which Vijay Mallya also owns.

HISTORY
Kingfisher Airlines was established in 2003. 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.
Ever since its launch in May 2005, Kingfisher Airlines has blazed a trail of innovations and introduced a range of market-firsts that have completely redefined the whole experience of flying.

Cont.
They were initially incorporated as a private limited company on June15, 1995 in Karnataka with the main object of pursuing chartered aviation services both for commercial and non commercial purposes in India and to provide all aviations related services. Kingfisher Airlines was the first Indian airline to introduce in-flight entertainment (IFE) system on domestic flights.

KINGFISHER CRISIS
Kingfisher is facing financial problem from last few years and due to that they are not able to pay salary to their workers. Due to this problem, pilots and co-workers are leaving their job and hence they are not having pilots and so their plane are idle. Eleven public sector banks, which were alloted shares by Kingfisher Airlines as part of debt recast package, have seen erosion of about Rs 165 crore in the value of the 17.5 per cent equity held by them in the debt-ridden carrier. These banks, including State Bank of India, Punjab National Bank, Bank of India and IDBI Bank were allotted 8.8%Kingfisher shares on March 31, 2011 at Rs 64.48 a piece as per the SEBI formula.

Cont.
A shocking 149 flights - 36% of its daily allocated schedule were not operated. Officially, Kingfisher has said that it has cancelled flights to reconfigure its Airbus A-320 aircraft. However, it is learnt that around 130 pilots have quit the cash-strapped carrier in the past few weeks.

Also, airport operators and oil companies have massive dues running with Kingfisher and are demanding that owner Vijay Mallya pay up. Given the shortage of crew and funds, the airline has truncated its schedule, perhaps opting to "fly less and spend less".

Cont.
Kingfisher Airlines fell to fifth place in domestic market share during November, from third in the previous month, after the cash-strapped carrier grounded planes and cut routes.

Kingfisher, which was once India's second largest carrier by passengers, recorded a market share of 14%,ahead only of budget carrier Go Airlines.
It has debt of about 65 billion rupees owed to a consortium of banks led by State Bank of India.

COMPETITORS
The country's largest airline, Jet Airways, including its unit JetLite, had the largest market share of 27.1%, followed by budget carrier IndiGo with 19.8% and Air India with a 17.4% That growth has failed to translate into profits for India's airline industry, where all the major carriers except Indigo are loss-making, hit by high jet fuel costs and an inability to raise fares in a cut-throat market. The Centre for Asia Pacific Aviation has forecast a record USD 2.5 billion to USD 3 billion loss for Indian airlines industry for the fiscal year ending March 2012, with state- run Air India alone likely to account for more than half of it

MORE PROBLEMS
Cash-strapped carrier Kingfisher Airlines has not deposited with the government most of the income tax it deducted from its employees' salaries for the last two fiscal years. Kingfisher has about Rs. 130 cr. tax deducted at source to be deposited with the government and has committed to pay it by the end of the current financial year to March 2012.

HELPING HAND
The lenders to struggling Kingfisher Airlines are trying to help it and are open to extending further loans to the carrier, said the leader of a consortium of the airline's banks. Kingfisher shares rose more than 2% after the SBI chairman's comments. Indian company Sahara , meanwhile , plans to lend Kingfisher more than Rs. 750 cr. Along with these provisions, even the government is planning to give a bailout to the debt-laden carrier- KINGFISHER so as to support the Indian aviation industry.

PROPOSALS
Kingfisher Airlines will become part of the global airlines' alliance 'one world' with effect from February 10 next year. The Vijay Mallyaowned carrier would become the first airline from the subcontinent to join any of the global airline groups, the two others being 'Star Alliance' and 'Sky Team', spokespersons of the airline and the alliance said.

THE FINAL VERDICT

Kingfisher Chairman Vijay Mallya said last month that Kingfisher stopped flying on heavily loss-making routes, and the carrier had also grounded some aircraft for fleet reconfiguration after the airline decided to discontinue its low-cost business. Debt-laden Kingfisher is scouting for funds and is negotiating with its lenders for 7 billion rupees of working capital. The airline aims to cut debt to 37 billion rupees through sale and lease-back of aircraft, sale of a property in Mumbai and conversion of rupee loans into foreign loans at a lower interest rate.

Cont.
Besides the DGCA scrutiny, Kingfisher faces the threat of unpaid aircraft leasing companies seeking the return of their planes. Spare part vendors too - like other creditors - want their past dues to be cleared along with current ones.

In its current health, Kingfisher has two options - shut down or downsize significantly to survive for some time till either the environment improves or a suitor is ready to buy the airline.