Presenting

The king without fishes

Outline
About the company

The crisis
Blamed for The helpless king In the news Promises done Controversies

About the company

Based in India

Parent company United Breweries Group, has a 50%

stake in low-cost carrier Kingfisher Red Second largest share in India's domestic air Kingfisher Has been Certified as being one of six Airlines in the world to have a five star Rating from Skytrax Key people - Vijay Mallya (CMD) - Sanjay Aggarwal (CEO)

The crisis
Airline commenced operations in 2005 the company is reporting the losses. Situation became horrible after acquiring the Air Deccan in 2007 for RS.550 cr. After acquiring the Air Deccan, the company suffered a loss of over Rs. 1,000 crores for three executive years. By 2012, the airline accumulated the losses of over Rs. 7,000 crore

several members of its staff going on strike.

BLAMED FOR
Managing the transition: keeping all the stakeholders engaged. Cut-throat fares, high fuel prices, and high taxes. Air India started the price competition which forced all the airlines to lower prices. Strike Problem. Cancellation of flights. Lack of Management. Dissatisfaction of Loyal costumer.

EMPLOYEE DISPUTE
Angr y Kingfisher staf f repor tedly refused to attend meetings with the management Talks between the airline management and Delhi -based pilots and engineers failed, thus operations license got cancelled.

Staf f promoted airline staged demonstrations wearing black bands and candles to demand speedy disbursal of their dues.
The protests also came af ter the wife of a Kingfisher employee committed suicide in New Delhi. Kingfishers wage bill works out to approximately Rs.30 crore a month.

EMPLOYEES DISPUTE
Sep 30/2012 6000 employee's on strike

Non payment of 7 months salary worth

RS. 464 crores Went long for 26 days Loss of 8 crore per day worth Rs.208 crore

In news

STEPS TAKEN TO RESOLVE

Promise of paying 3 month salaries, as on25 oct,2012. 1st month(march) in 24hrs 2nd month salary(april) within a month 3rd near diwali

Result all employee's rejoined to work

Continued

Only 2,000 have received salaries until March. From April, there have been no salary payments. Already, the government and the civil aviation regulator, Directorate General of Civil Aviation (DGCA), have stressed that the airline wont be allowed to fly unless salary issues are settled. There is so much that the lenders can do.Providing NOC.

About 17 banks -- led by the State Bank of India -- collectively have an exposure of Rs. 7,000 crore to the airline.
The lenders together hold around a 23 per cent stake in the airline.

The effect

Affect to company

The helpless king -Steps taken

Debt restructuring also couldnt change the game. By restructuring, company had reduced the interest charges by Rs. 500 crores every year, but due to the high leverage condition and increase in cost, the company started to face the liquidity problem. The company had no funds in hand and it created the following payment problems.

License cancelled!!

By:Sanchit ahuja Sanchit bansal Aman chawla Veekesh malik Rashim monga