Kingfisher Debt Crisis
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Code : FCF0021
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Region : India
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Kingfisher Airlines Kingfisher Airlines, a subsidiary of The United Breweries Group (UB Group), was established in 2003. Through its parent company, the airline had a 50 percent stake in low-cost carrier Kingfisher Red. The airline began its domestic operations on May 9, 2005, with a fleet of four new Airbus A320-200s. At the launch of the airline, Dr.Vijaya Mallya (Mallya), Chairman of The UB Group, said, “We are committed to achieving our ambition of making Kingfisher Airlines India’s largest private airline both in capacity and market share by 2010”... Indian Aviation Industry The Indian aviation industry was primarily a government-owned industry till the mid-1980s. The first air service in India was started by Tata Airlines in 1912 as an air mail service. Later in October 1932, Indian National Airways in 1933 and Air Services of India in 1937 ventured into scheduled passenger traffic. At the time of independence, there were nine air transport companies operating in India, carrying both passengers and air cargo... Kingfisher in Financial Trouble Soon after the merger, Mallya gradually phased out Air Deccan’s ageing aircraft – ATR42s and A329s and replaced them with an entire new fleet of aircraft of the Airbus 320 family, Airbus 330, and ATR 72 for which it had placed orders earlier. Earlier in November 2005, the airlines had placed an order for 20 ATR72-500 aircraft, valued at US $ 350 million and 30 Airbus 320s valued at US $ 1.9 billion . It had also placed orders for five A330-200 aircraft, five A380 aircraft, and A350-800s aircraft, valued at over $3 billion... |
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