Kingfisher Doomed!!

Patriot

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King can not have good time all the time as air hostesses are not being paid !!:p

I feel fishy about kingfishers intentions, it seems they themselves want to doom it. VM is a very shrewd businessman & a known for turning around the loss making businesses. VM is looking to hunt some big fish by getting policy changes on FDI in Air transport.
 

pankaj nema

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The 6000 crores debt that King fisher owes to the Banks is gone

Mr Mallaya has just wasted Public money He has no intention of returning the 6000 crores that
Kingfisher owes to the banks

Mr Mallaya must be prosecuted
 

amoy

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The 6000 crores debt that King fisher owes to the Banks is gone

Mr Mallaya has just wasted Public money He has no intention of returning the 6000 crores that
Kingfisher owes to the banks

Mr Mallaya must be prosecuted
Isn't it a limited liability company ?
 

LalTopi

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Kingfisher service was rubbish. After the experience of their service during the 2010 Icelandic volcanic diruptions, I and most people I know have been avoiding Kingfisher like the plague. Other Airlines - Jet, AirIndia, BA etc. paid for their stranded passangers accomodation and laid on extra flights. Kingfisher, basically just told myself and my family that we were on our own, and eventually after spending all night on the phone to them I got separate flights back to London with them two weeks later.

In summary - really pretty girls and nice uniforms, but lousy service when it really matters!

PS - this last Christmas I flew with trepidation with Air India, and although the Air stewardess looked like an olympic wrestler and refused to serve me more than a shot of their standard issue whisky - at least they got me from A to B and back again on time with no delays.
 
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Kunal Biswas

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We will get the beer Right ? beer not closing..

PS. I hate sandpiper..




PS. I left drinking though i care..
 

ajay_ijn

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A very good take by Capt. Gopinath on the issue. High time KFA was converted into a professionally run set up, before this company goes bust. Its the GoI's call.

Banks should convert their debt into equity, remove Vijay Mallya to save Kingfisher Airlines: GR Gopinath - Economic Times

- GR Gopinath


The banks, aircraft lessors, government and the two airlines -Kingfisher and Air India - are finding themselves between a rock and a hard place. In the case of Air India, voices are being heard that it is a government-owned airline so the government being the owner can do what it wishes, implying scant regard for public money, and that misdemeanours or mismanagement can be overlooked. Whom do they hang any way? There are IAS CEOs who are transferred to plum postings after their tenure in Air India as they build a good 'network' during their stint and reciprocation is expected and accepted.

And to be fair, you can't hold them responsible and accountable as there are systemic problems in the organisation with political interference. There were outstanding CEOs from IAS who did an excellent job when the organisation they were serving were privatised and they were made accountable to deliver - to name just two - Jagdish Khattar of Maruti Suzuki and P J Nayak of Axis Bank built great businesses. Kingfisher Airlines is another matter.

When Vijay Mallya asked for a bailout from government, Rahul Bajaj said it will be "privatisation of profits and socialisation of losses".

The Kingfisher chairman's flamboyant lifestyle does him no favours either when he goes abegging for a bailout. Selecting exotic destinations to shoot hot models for calendars, owning Formula-1 car-racing teams and Twenty20 cricket franchises, publicising his party-going, etc, are points that will be raised against him in case taxpayers have to save the airline. There is already an increasing chorus against a bailout. Mallya had this to say in his defence, "I pay my taxes and I owe no one any apology for my lifestyle."

To be sure, Mallya might be prompt in filing his personal income-tax returns. But when over Rs 400 crore of taxes are not paid, and dues in excess of Rs 2,000 crore in addition to unserviced bank debt are owed to vendors, and close to half the airline's fleet is on ground for more than two years for want of parts, and you are buying exotic islands, villas and yachts around the world when your empire is burning, it is bizarre and reminds you of the famous Ray movie Shatranj ke Khiladi. But you can redeem yourself by humility, accepting the blunders and be a man and take the hit on the chin, pay the price and move on.

What can the government and banks do? Punishing Kingfisher Airlines for their rage against Mallya is like cutting your nose to spite the face. With over 10,000 employees and close to Rs 10,000 crore of bank and vendor debt, Mallya is no more Kingfisher than Air India is India. The government must be decisive and move with speed. The banks must convert Kingfisher debt into 100% equity at market value, which means they will recover only fraction of their debt, and must recover the balance, whatever possible, through sale of mortgaged shares and assets of the promoter and his holding company.

Also, they must wrest complete control of the airline from the profligate promoter who ran amok and appoint a board that, in turn, can hand it over to professionals, stabilise operations and, at a right time, sell it to new investors. This will save jobs and assets, that will deteriorate in no time and, most vital, if the organism disintegrates, it will be difficult to breathe life back and the value of a lot of intangible assets will vanish in a jiffy. Most important, it will ensure a sudden vacuum is not created in the airline sector, creating a huge imbalance in demand and supply and hitting air travel with soaring prices and cartelisation.

Creating lost capacity with new airline entrants will take 4-5 years. If the US, the symbol of capitalism and free market, could do it in case of General Motors, Ford and iconic banks like City Bank, and if recently we had a successful, smooth and quick restructuring and transfer of ownership of Satyam Computers, it can be done in the case of Kingfisher too. Allowing bankruptcy of Kingfisher, which looks inevitable, the banks will anyway lose everything and cause grief to employees and hundreds of small vendors who may also, in turn, go bankrupt.

Air India, the other liability of the government, deserves a dispassionate assessment and move towards privatisation, ensuring employees are taken care of. British Airways, Lufthansa and Quantas, to name a few, which were national carriers

and on the verge of bankruptcy and beset with similar ailments and problems of trade union opposition, etc, were successfully privatised without causing trauma to workers. In the case of British Airways, it was privatised over eight years. It can easily be done without causing panic and layoffs and is easier than solving the Kingfisher mess. Unlike Kingfisher, Air India has huge assets in land, building, engineering, bilateral grandfather rights, slots, extensive network and a powerful brand with fond nostalgia.

It is in no different state that British Airways or Lufthansa were when they were privatised two decades ago. Hive off all of Air India's land, buildings and assets across the country into a separate entity, and from its sale, compensate employees with a golden handshake. The money that the government will realise from that sale will probably leave some extra cash in the treasury as Air India holds prime family silver. The airline can then be completely privatised with sustainable debt and a lean airline with operational assets necessary to run the airline will be an attractive proposition for buyers. This will stop continued bleeding and, on the contrary, government will benefit from annual revenue as against loss, as in the case of Maruti Suzuki.

I am saying bleeding will continue because nothing has changed structurally and Air India, the way it is managed, is inherently flawed and will never be able to face fierce competition and make money. But the government has work to do in creating a vibrant aviation sector. It is time the Prime Minister steps in and leads the government to create a long-term strategic vision for aviation for all stakeholders including air cargo, maintenance, repair and overhaul (MRO), manufacturing of components for aircraft, which is a multi-billion-dollar industry, airports (which have become monopolies) and are the biggest impediment to expanding the consumer base and are unwittingly killing the golden goose. The booming economy will collapse if aviation, which is integral to economic growth, collapses.

The government must build an ecosystem for a sustainable and robust aviation sector rather than make individual policies to suit Air India, or Jet Airways or Kingfisher Airlines, as has been the case all these years.

Less than 3% of Indians can afford air travel. Last year, only 50 million domestic passengers flew. If the government, for example, asks what policy framework and incentives do we need, take it to 20% in the next five years, how do we make India an international aviation hub for passengers, design, manufacturing, MRO, cargo on the lines of Singapore, by taking advantage of our technical manpower, natural resources and exploding economy, and should aviation be treated as a core infrastructure, we will get the right answers. Time is running out and the Prime Minister, in consultation with the aviation minister and other ministries, must act with speed and decisiveness. Or, as Shakespeare said, "Indecision is in itself grief."
I do agree with above, Banks are looking like powerless while Mallya is playing the entire drama.
6500 Crores is not a small figure, thats almost 0.1% of all banking assets in India. it will hit banks profitability. Banks have to take control the ship.
 

ejazr

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No bailout from the government for King fisher please.

Let it go through the proper bankruptcy channels and if Mallya looses his money in the process, then that is what free markets is about.
 

pmaitra

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He had all the fun wanted to have:


Kingfisher flies or not, he will definitely fly.

There are raunchier photos but I'll stick to this one! :)
 

sesha_maruthi27

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Mukesh has made some sort of offer that he will buy some shares of Kingfisher. This is the latest from the news channels.........
 

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