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How Long Until Kingfisher Goes Bankrupt?  
User currently offlineTemph0 From United Kingdom, joined Dec 2006, 9 posts, RR: 0
Posted (5 years 8 months 1 week 11 hours ago) and read 10085 times:

Kingfisher is in the middle of some public issues regarding leased aircraft, fuel and liquidity. GECAS is trying to reposess 4 A320's (which I believe was delayed by Indian courts), The government had to negotiate a fuel payment plan for past bills and extend credit for future purchases to 90 days, and ICICI bank is rumoured to no longer be willing to provide lines of credit (and is trying to get their existing loans to Kingfisher called back).
All this implies that Kingfisher is running out of cash, and may not be able to raise more.
The UB group (parent) itself is not doing too well - how long will they support Kingfisher? Is there a silver lining somewhere that will save Kingfisher? If not, how long until they go bankrupt?

thanks.
Daniel

15 replies: All unread, jump to last
 
User currently offlineLHR777 From , joined Dec 1969, posts, RR:
Reply 1, posted (5 years 8 months 1 week 11 hours ago) and read 10085 times:



Quoting Temph0 (Thread starter):
The UB group (parent) itself is not doing too well - how long will they support Kingfisher? Is there a silver lining somewhere that will save Kingfisher? If not, how long until they go bankrupt?

Is the 'silver lining' called 'Jet Airways'? How are 9W's current finances?


User currently offlineJfk777 From United States of America, joined Aug 2006, 8249 posts, RR: 7
Reply 2, posted (5 years 8 months 1 week 9 hours ago) and read 10085 times:
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United Brands Group is a huge Indian conglomerate, owned by Vijay Millaya. United's main line is beer sales,so they have huge resources to suppport the airline. It would be a huge black to India'a Richard Branson if Kingfisher went bankrupt.

User currently offlineFlying Belgian From Belgium, joined Jun 2001, 2390 posts, RR: 9
Reply 3, posted (5 years 8 months 1 week 6 hours ago) and read 10087 times:
Support Airliners.net - become a First Class Member!

I've read in a magazine that Dr Vijay's assets have lost 90% of their value with the financial crisis...
He desperately seeks financial backing for his Formula One team as well...
Not too sure spending his time in the flight attendant selections sessions was the best way to run his business.

FB.



Life is great at 41.000 feet...
User currently offlineBlrBird From United States of America, joined Apr 2005, 578 posts, RR: 0
Reply 4, posted (5 years 8 months 1 week 5 hours ago) and read 10087 times:



Quoting Temph0 (Thread starter):
If not, how long until they go bankrupt?

According to indian media reports probably not very long....



from star dust....
User currently offlineComorin From United States of America, joined May 2005, 4895 posts, RR: 16
Reply 5, posted (5 years 8 months 6 days 20 hours ago) and read 8822 times:

The two countervailing forces facing aviation in India right now are a drop in demand and high fuel prices. Fortunately fuel prices are dropping rapidly, but so is demand. Low fares are well and good to build market share but unsustainable over the long run.

The question is, can IT ride out the next few months until it sees the benefit of lower ATF costs. It seems, unfortunately, that we are talking weeks right now. It's a shame that another high-quality operation may hit the rocks, but I'm hoping they'll make it.


User currently offlineMinister From India, joined Jul 2006, 28 posts, RR: 0
Reply 6, posted (5 years 8 months 6 days 12 hours ago) and read 8162 times:

According to Last Week Kingfisher has Rs. 500 Crores cash left.

That is about $ 13,00,00,000. With the fuel bills going through the roof, its about 2 months for Kingfisher.

Prajay


User currently offlineHAWK21M From India, joined Jan 2001, 31660 posts, RR: 56
Reply 7, posted (5 years 8 months 6 days 11 hours ago) and read 7909 times:

Both IT & 9W are facing a cash crunch.....next is the pink slips & salary cuts.


VJM will close down before sinking his beer business.

Time will tell.
regds
MEL



Think of the brighter side!
User currently offlineComorin From United States of America, joined May 2005, 4895 posts, RR: 16
Reply 8, posted (5 years 8 months 6 days 9 hours ago) and read 7688 times:

I'm sure VJM is shopping his airline now, must be a very painful thing to do. Do the laws in India allow a BA or SQ to invest in or bail out IT?

User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 9, posted (5 years 8 months 6 days 8 hours ago) and read 7676 times:

I've read opinions elsewhere that Mallaya would shore up IT with profits from his beverage business. Is this likely?


"When all is said and done, more will be said than done".
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 10, posted (5 years 8 months 6 days 8 hours ago) and read 7624 times:

the beer business may be great but it can't keep an int'l airline alive on its own. The airline has to make money or at least stop hemorrhaging it.

Remember, Kingfisher was the airline that ordered A380s before even having the right to fly int'l routes. Indian airlines let deregulation fill their heads with way too many fantasies of expansive networks and huge, new fleets. In the airline industry, the airlines that have achieved those things have done it through lots of work and lots of time. Kingfisher wanted to do it with neither of those things even with all the other wealth available. No one wants to buy it when it is losing as much money as it clearly is now. Kingfisher will likely go down like Braniff in the US.


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 11, posted (5 years 8 months 6 days 8 hours ago) and read 7579 times:

Perhaps the failure of the Air Deccan IPO a while back was "the handwriting on the wall"? I remember raging debates on this forum and others concerning the sustainability of the Indian domestic market. I have a feeling that if IT crashes and burns, they'll have company in other markets where ambition and a large checkbook trumped market reality.


"When all is said and done, more will be said than done".
User currently offlineTemph0 From United Kingdom, joined Dec 2006, 9 posts, RR: 0
Reply 12, posted (5 years 7 months 3 weeks 6 days 13 hours ago) and read 6716 times:

thanks for the insights. It seems every week there is another supplier getting into a public fight with Kingfisher (GECAS, Air India ground handling, Airport authority), and each time Kingfisher takes a very aggressive stance and blames the supplier for its woes. (does Kingfisher management have a reputation for being overly aggressive?)
The major solutions proposed right now involve the Indian government - allowing foreign carrier ownership, industry bailout. How fast do you believe the government might move to save Kingfisher and the other airlines? Given the massive bad press Jet got from trying to lay off 15-20% of its employees (and had to cancel the layoffs), is it realistic that the government would let Kingfisher liquidate and have many more forced layoffs?


User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3429 posts, RR: 4
Reply 13, posted (5 years 7 months 3 weeks 6 days 9 hours ago) and read 6366 times:

Would an option be for the Gov't to bail them out and simply fold IT into the combines Air India/ Indian Airlines company?

Any more news updates on IC and their financial woes?

AA1818



“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3429 posts, RR: 4
Reply 14, posted (5 years 7 months 3 weeks 6 days 8 hours ago) and read 6364 times:

http://www.airliners.net/aviation-fo...eral_aviation/read.main/4215923/#4

Just saw that thread. Is 25% the maximum foreign ownership?

AA1818



“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
User currently offlineHAWK21M From India, joined Jan 2001, 31660 posts, RR: 56
Reply 15, posted (5 years 7 months 3 weeks 5 days 14 hours ago) and read 5864 times:



Quoting Comorin (Reply 8):
Do the laws in India allow a BA or SQ to invest in or bail out IT?

Under the existing laws...No Foreign airline can invest in an Indian airline.

Quoting Lumberton (Reply 9):
I've read opinions elsewhere that Mallaya would shore up IT with profits from his beverage business. Is this likely?

It would be a big dent in his beer profits & not worth it.Better still to reduce aircraft/employees & consolidate until better times return.
regds
MEL.



Think of the brighter side!
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