Citizens' Issues
Public Interest Exclusive
Kingfisher: How to put a brave face while time and planes fly away

Kingfisher is curtailing its operations to stop huge losses and also putting up a brave face through press release on its website

Times are certainly bad for the King of Good Times aka Dr Vijay Mallya and his Kingfisher Airlines (KFL). Its flights are getting cancelled, accounts getting frozen due to non-payments, lessors are taking away planes given on rent, IATA agents not booking KFL tickets seamlessly anymore and pilots and employees being deprived their salaries. What more can anyone expect.

All the problems are caused by only one factor, money. The airline neither has any hard cash nor is anyone willing to give it a ‘loan’ or bailing it out. In fact, according to a report by Canadian research firm Veritas, KFL was funding itself at the expense of its employees and the Indian exchequer.

“KFL’s book equity has been wiped out although audited financials pretend otherwise. The airline is burning cash at a rapid rate, we estimate Rs301.10 core ($ 65 million) in the first quarter of 2011-12, is in a business that requires capital perpetually, has no pricing power given six carriers fighting over the major hubs in India, is dependent on the vagaries of the price of oil and the largesse of state-run financial institutions in India, and its parent UB has run out of financial room to accommodate the needs of this capital-starved child," Veritas said in a report.

According to reports from the British media, Dr Mallya has pumped a further £20 million into his Formula One team ahead of the start of the motor racing season in Australia next week. Accounts filed at Companies House for Silverstone-based Force India revealed that Watson, the personal investment vehicle used by Indian tycoon Vijay Mallya, loaned the team nearly £7 million. Mallya’s Kingfisher Airlines and beer and spirit businesses pumped in a further £13 million through sponsorship of the team, which finished in sixth place in the constructors’ championship last season, said a report by

And this is when the airline was starving for hard cash to keep running its operations. However, while all the 'bad' things are happening around, the carrier has put up a brave face, at least admitting that something is 'wrong' somewhere.

Here is the latest press release put up by Prakash Mirpuri, vice president for corporate communications, KFL...

Statement From Kingfisher Airlines - Mumbai, March 14, 2012

1.Despite the shortage of crew, Kingfisher Airlines operated 101 flights on 13th March and will operate 101 flights on 14th March.
2.Our prime mission is to maintain schedule integrity by predicting in advance what we can with the sole objective of minimising, if not eliminating guest inconvenience.
3.We try hard 24X7 to inform guests in advance of cancelled or combined flights and to give them the option of travelling on other airlines or to take a full refund.
4.There will, inevitably, be a small number of guests who are inconvenienced partially because we could not access them personally but only via their agents.
5.Kingfisher apologises to all those who were affected.
6.Whilst many of our pilots and engineers have expressed their disappointment, we not only sincerely apologise to them but wish to advise that our chairman will meet the pilot fraternity on Thursday 15th March in Delhi.
7.There is a lot of sensational speculation and assumption about us.
8.We request one and all to appreciate the serious handicaps we face not only because of our frozen accounts but because of the operating environment. We are working hard to resolve the issues that confront us given the current environment.
9.We would like to confirm that we are curtailing our wide body overseas operations that are bleeding heavily. To this end we have already returned one Airbus A 330-200 to the lessor in the UK. Positive and immediate action is being taken on all fronts to cut costs.
10.We are trying to protect the interests of our valuable employees. We share their pain caused by unpaid salaries and we are also trying to protect their jobs apart from paying salaries.
11.Whatever the schedule we operate, we would like to assure our valued customers that your flights will depart as shown and on time.
12.The suspension of our ICH and BSP accounts with IATA resulted from the freeze of our IATA accounts by the tax authorities.
13.We have, obviously suffered as guests are not able to book seamlessly through IATA travel agents as before. This serious handicap has been partially mitigated by encouraging our travel partners to establish booking arrangements on their individual platforms. Nevertheless, this greatly influences our ability to operate certain flights and it is, therefore, incorrect to assume that pilots are solely responsible.
14.We continue to work with the tax authorities to arrive at a solution to de-freeze our accounts as early as possible.
15.We are also working with our bankers to realise the urgent interim working capital as approved in the bankers consortium meeting held on 17th February. This is not dependant on State Bank of India as widely reported.
16.We fully understand that State Bank of India can only consider additional facilities once our account with them is standard and this has been debated and minuted at the last consortium meeting.
17.The government's final verdict on removing the restriction on investment by a foreign airline within the existing FDI limit of 49% is awaited. We can confirm that there is interest from prospectives on this basis.
18.Finally, we wish to assure all guests, employees and all stakeholders that we are doing our very best.
Prakash Mirpuri
Vice President - Corporate Communications
Kingfisher Airlines Ltd.



Krishnaraj Rao

5 years ago

Looks like Vijay Mallya is drinking too much of his own stuff before he goes into Board meetings. His judgment is impaired. Seriously!

Krishnaraj Rao

5 years ago

"Mallya’s Kingfisher Airlines and beer and spirit businesses pumped in a further £13 million through sponsorship of the team..." -- WTF?! These guys couldn't pay oil companies' dues and pilot salaries, and they shelled out sponsorship money?! That is criminal!

Nagesh Kini FCA

5 years ago

The Kingfisher Auditor's must be read before going further into its Balance Sheet and Profit & Loss Account.
It very explicitly spells out that Kingfisher net worth has eroded and it ceases to be going concern!
What more do the banks want? When the lead bank SBI and other lending banks declare it a NPA how come other banks choose to classify it 'sub-standard'. Nice way to play around the King of Good Times eh!

Public Interest Exclusive
Railway Budget disappointing for Mumbai, say experts

New announcements every year is what rail passengers from Mumbai feels on the Rail Budget. However, they keep wondering about what happened to last year’s announcements

Railway minister Dinesh Trivedi, announcing his maiden railway budget, made a host of promises for Mumbai. Additional 75 train services, elevated corridors from Churchgate to Virar on the Western Line, 12-coach rakes for the Harbour Line were among the prominent ones. Experts, however, have lambasted the minister for ignoring and not updating on the slew of promises made last year by his party chief and the then minister Mamata Banerjee. They called it a “disappointing budget” for Mumbai.
“The minister neither gave any update on the last year’s promised projects nor the balance sheet. He made new announcements. This year 75 new train services are promised for the suburban section. But is there any rake available? Out of 32 additional trains promised last year, for the Central line, only two have started. There is no announcement on safety measures like giving compensation to victims of local train accidents. He talked about development of stations through PPP (public-private partnership). This promise was made last year, as well. Even there is no rationale behind fare hike. Thankfully local commuters won’t be much affected by the hike,” said Madhu Kotian, president, Mumbai Rail Pravasi Sangh.
“There were promises of running anti-collision device on three grounds, a bullet train to Baroda, Gujarat. What happened to these promises?” he asked.

Passenger fares have been increased by 2 paise per km for suburban and ordinary second class; 3 paise per km for mail/express second class; 5 paise per km for sleeper class; 10 paise per km for AC Chair Car, AC 3 tier and First Class; 15 paise per km for AC 2 tier and 30 paise per km for AC I.  Minimum fare and platform tickets will now cost Rs5.

Subhash Gupta, president, Yatri Sangh Mumbai told Moneylife that, “What is the use of hiking train fares when a little revenue will be generated from it. The minister announced some projects which are good for Mumbai. But the bigger question of implementing all the projects remains unanswered. Last year, the minister announced that the ministry will form a committee to look after implementation of various projects. This year, he did not mention anything about it.”

Passenger associations have, however welcomed the announcement of developing a new coach complex near Panvel in Navi Mumbai and coach maintenance complex at Kalamboli.
Mumbai-based transport experts feel that the essential requirements of Mumbai’s train commuters are not covered in the budget. “Considering the commuter population of Mumbai, the budget should have adequate allocation for providing escalators for commuters, quick disbursement from the station, medical assistance for victims of train accidents within three minutes of the occurrence of such an event and raising the platform height at par with the coach and platform for easy boarding. Nothing was mentioned about these things in the budget,” Sudhir Badami, a transport export told Moneylife.




5 years ago

What disappointing ?.Why people not thinking from the other side too.Can railway print money for expansion ?. There is all round protest on just 5 ps/Km fare hike.Really share .If people think like this Railway will shut down in few years.

Market to take a direction after the Budget: Wednesday Closing Report

Short-term movement will be sideways for now

On Tuesday, foreign institutional investors were net buyers for third day in a row, while domestic institutional investors changed to net sellers. All the Asian indices opened in the positive today on the back of positive news from the US; where the retail sales topped expectations, the Federal Reserve left interest-rates at record lows and most of the largest US banks passed their annual stress test. We had mentioned in our yesterday’s closing report that the Nifty may reach the level of 5,495 and further to 5,610. Today the index crossed the first resistance. However, we may now see a sideways move. The NSE saw a volume of 86.11 crore shares, the highest since 6 March 2012.

Fitch Ratings on Tuesday upgraded Greece's credit rating from restricted default to B-minus with a stable outlook following the completion of the country’s debt swap with private investors.

The Sensex and the Nifty opened in the positive and in the first hour itself hit their intraday highs. The Sensex opened at 18,003 while Nifty resumed trade at 5,491. The Sensex’s intraday high was 18,041 while the Nifty touched 5,499. The highs were their best since 24 February 2012.

However, soon the market started a downward journey with the benchmarks hitting their day’s lows of 17,837 and 5,438 after the latest data showed inflation rising at a faster-than-expected 6.95% in February 2012. The benchmarks gained some strength after railway minister Dinesh Trivedi presented the Railway Budget 2012-13 in the Lok Sabha.  

Both the Sensex and the Nifty closed in positive. The Sensex rose 106 points (0.59%) to close at 17,919 while Nifty rose 34 points (0.63%) to settle at 5,464.

The wholesale price index (WPI) rose a faster-than-expected 6.95% in February from a year earlier, mainly driven by a surge in food prices, government data showed on Wednesday. The annual reading for December 2011 was revised upwards to 7.74% from 7.47%. WPI inflation stood at 6.55% in January 2012.

Train fares have been hiked for the first time in eight years. The railway budget stressed more on the safety aspect along with focusing on issues of consolidation, de-congestion and capacity augmentation, modernisation and bringing down operating ratio. According to the minister, Indian Railways will invest Rs 7.35 lakh crore during the 12th Five Year Plan period (2012-17), against Rs 1.92 lakh crore in the current one. The railways also plans to recruit about 100,000 people in the 2012-13 fiscal year

Shares of companies linked to orders from Indian Railways were: BEML (up 0.90%), Hind Rectifiers (rose 0.53%), Titagarh Wagons (down 4.25%), Kalindee Rail Nirman (down 6.55%), Container Corporation of India (down 1.49%), Kernex Microsystems (down 5.19%), Simplex Casting (down 3.97%), and Texmaco (down 0.50%)

All eyes are now set for mid-quarterly review of monetary policy tomorrow. The bankers are mixed in their views with most of them opining that after having cut cash reserve ratio (CRR) by 0.75 percentage points last week, the Reserve Bank of India (RBI) may not do much. While others feel that it is time for RBI to cut policy rate so that growth can be propped up which is on the path of moderation.

Last week, the RBI slashed CRR, the percentage of deposits that banks have to keep with the RBI, from 5.5% to 4.75%. With this, the central bank had infused Rs 48,000 crore into the economy.

All Asian indices, except for Shanghai Composite and Hang Seng closed in the positive on Wednesday. At the time of writing, all the European indices were trading in the positive, while the Dow futures and the S&P 500 futures were trading at a premium.

The advance-decline ratio on the NSE was at 797:903.

Among the broader indices, the BSE Mid-cap index gained 0.32% and the BSE Small-cap index fell 0.28%.

Among the sectoral indices BSE Bankex led (up 1.83%). Others among the top five positive performers were BSE Capital Goods (up 1.60%), BSE PSU (up 1.38%), BSE Power (up 1.05%) and BSE FMCG (up 0.90%). While BSE Realty was at bottom (fell 0.96%). Others at the losing end were BSE IT (fell 0.67%), BSE TECk (fell 0.51%), BSE Consumer Durables (fell 0.19%), BSE Metal ( fell 0.10%)

NTPC (up 2.63%); ICICI Bank (up 2.61%); Larsen & Toubro (up 2.47%); ONGC (up 2.21%) and Tata Motors (up 2.19%) were the top gainers on the Sensex. The major losers were TCS (down 3.56%); Wipro (down 1.41%); Tata Steel (down 1.10%); Jindal Steel (down 1.06%) and Bajaj Auto (down 0.93%).

The top performers on the Nifty were PNB (up 5.62%); BPCL (up 3.15%); NTPC (up 2.74%); Axis Bank (up 2.71%) and Larsen & Toubro (up 2.70%). The main laggards were TCS (down 3.76%); Jaiprakash Associates (down 3.17%); Reliance Communications (down 1.60%), Tata Steel (down 1.41%) and DLF (down 1.25%).

IL&FS Transportation Networks has bagged a road project from National Highways Authority of India in West Bengal and Odisha estimated to cost about Rs 471.05 crore. The project is on toll basis with a concession period of 24 years including construction period of 2.5 years and the estimated cost of the project is Rs 471.05 crore. The project is for construction of new bridges, structures and repair of the National Highway (NH-60) stretch between West Bengal and Odisha, it added. Besides, the project also involves operations and maintenance of the existing four-lane highway under National Highways Development Programme phase-I from Kharagpur in West Bengal to Baleshwar in Odisha. The stock closed at Rs 195.35 on the BSE, up 1.88%.


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