Kingfisher sinking like the Titanic
Join Date: Mar 2003
Location: N571
Posts: 137
Likes: 0
Received 0 Likes
on
0 Posts
This situation for the airlines, started with the price of fuel going thru the roof.That was something VJ or Goyal or anyone else could not have anticipated when they leased the A/C.
Aiming to deliver a world class product,when the only other local offering is Air India(and creating new jobs) is a commendable entrepenural endeavor.
A rigid stand based on ink on paper,and removed from emerging ground realities is something lease companies/financial institutions could do well to reconsider.
Chartiy is not expected,but if they expect to reap the rewards when the aviation industry booms,they should also consider a drop in the profits to allow the goose that lays the golden eggs to survive.
Aiming to deliver a world class product,when the only other local offering is Air India(and creating new jobs) is a commendable entrepenural endeavor.
A rigid stand based on ink on paper,and removed from emerging ground realities is something lease companies/financial institutions could do well to reconsider.
Chartiy is not expected,but if they expect to reap the rewards when the aviation industry booms,they should also consider a drop in the profits to allow the goose that lays the golden eggs to survive.
Join Date: Apr 1999
Location: England
Posts: 86
Likes: 0
Received 0 Likes
on
0 Posts
LSV, sorry, but my heart doesn't bleed for these "entrepreneurs". Regardless of the circumstances, whether it be good or bad times, if you do business with that country or those people you will get burned. It happens all the time and has done so for as long as I can remember.
It doesn't matter whether it is Government backed or private enterprise, you will get shafted. Better to make sure that any contract is under jurisdiction of a country outside India, but even then you will have to fight for your rights.
GECAS are not virgins in this game and you can rest assured that they will have water tight contracts in place, but will still have to fight to get their money or aircraft back. The Government will make it as difficult as possible but will not be able to stop justice being served.
The oil price and financial conditions have put many out of business in recent times, so why should any sentiment be awarded to these people?
It doesn't matter whether it is Government backed or private enterprise, you will get shafted. Better to make sure that any contract is under jurisdiction of a country outside India, but even then you will have to fight for your rights.
GECAS are not virgins in this game and you can rest assured that they will have water tight contracts in place, but will still have to fight to get their money or aircraft back. The Government will make it as difficult as possible but will not be able to stop justice being served.
The oil price and financial conditions have put many out of business in recent times, so why should any sentiment be awarded to these people?
Join Date: Jul 2000
Location: USA
Posts: 65
Likes: 0
Received 0 Likes
on
0 Posts
Mallya just fired the team principal and the chief technical officer of his F1 team.. Now the good Dr will be the fulltime head of his F1 team while his airline can't pay its bills on time 
Join Date: Jan 2009
Location: India
Posts: 163
Likes: 0
Received 0 Likes
on
0 Posts
No fuel for KF ???
Bangalore: Kingfisher Airlines will now have to pay upfront to buy aviation turbine fuel from oil companies to operate its regular scheduled flights.This follows the oil companies insisting on the new payment method, ‘cash & carry’ for the airline as it has failed to clear its dues.
An airline official told Business Line that even though some of the oil companies had threatened to stop supply of aviation turbine fuel to Kingfisher Airlines from today onwards, its operations remain unaffected and that it was sticking to all its schedules.
While oil industry sources maintained that the airline owes over Rs 1,000 crore in dues to the oil companies, the official who did not wish to be named, said it was only half of that amount. ATF constitutes about 50 per cent of the total operational cost of an airline.
The official said that the airline will abide by the directives of the Government with regard to settling of ATF dues with the oil companies. He said the airline was currently holding talks with Government officials on the issue of dues to oil companies.
Sources in the oil industry said that with Kingfisher Airlines agreeing to the ‘cash & carry’ mode, oil marketing companies will not carry out any immediate action against the airline, though they will continue to seek ways to get the dues from the airline.
The official from the airline pointed out that they have received a letter from the oil marketing companies (OMCs) asking for payment of interest on outstanding dues and bank guarantee. “A joint meeting of all stakeholders had been facilitated by the Government on October 22, 2008 where the representatives of the OMCs, airline chiefs and the Minister for Civil Aviation and the Minister for Petroleum and Natural Gas were present too. The minutes of this meeting do not make any reference to any of these two points (interest & bank guarantee) made by the OMCs in their latest letter, nor is there any record of this ever having been discussed or agreed to at that meeting. We have, therefore, taken this up with the Government and we will fully abide by any directions that the Government may give in this regard.”
Sources in the oil industry said that Jet Airways, Kingfisher Airlines and the National Aviation Company of India owe nearly Rs 4,000 crore in dues to the OMCs for supply of aviation turbine fuel.
The Government had earlier allowed a credit of 60 days and later extended it by another 30 days in October, 2008 after some of the airlines had expressed their inability to retain their existing staff because of soaring ATF prices at the time leading to huge losses for these airlines.
On October 22, 2008, the airlines were allowed to pay the total outstanding dues of Rs 1,500 crore in six monthly instalments by March 31, 2009. The OMCs had also agreed to revise ATF prices every fortnight instead of every month to pass on the benefit of falling ATF prices to the airlines
Join Date: Jul 2008
Location: mumbai
Posts: 18
Likes: 0
Received 0 Likes
on
0 Posts
Insecure
No one knows what is going inside Kingfisher.
Everyone including the flight crew and ground support staff are feeling very insecure about their jobs.
Just hoping the airline continous and its operations gets more streamlined.
Everyone including the flight crew and ground support staff are feeling very insecure about their jobs.
Just hoping the airline continous and its operations gets more streamlined.
Join Date: Jul 2008
Location: Here Today, Gone Tomorrow
Posts: 222
Likes: 0
Received 0 Likes
on
0 Posts
People promoted and company downsized.
Typical posturing before selling out.
Refer:Kingfisher Airlines rejigs management; elevates 21 officials -India Business-Business-The Times of India
Typical posturing before selling out.
Refer:Kingfisher Airlines rejigs management; elevates 21 officials -India Business-Business-The Times of India
..... Who on earth does that to himself.....
Join Date: Jul 2000
Location: Thailand
Posts: 942
Likes: 0
Received 0 Likes
on
0 Posts
Kingfisher 320 you are a miserable specimin of humanity. Gloating at others misfortune is a sign of weakness and ignorance. One day, when you are working for a company in trouble, I hope you remember how you laughed at others who find themselves in the unhappy situation you are in.
Perhaps you would have the decency to alter the title of your miserable thread?
Perhaps you would have the decency to alter the title of your miserable thread?
Join Date: Nov 2008
Location: In the torpedo tube above!
Posts: 212
Likes: 0
Received 0 Likes
on
0 Posts
I would give Mallya,90 days,tops 180 to either sell out(god knows to who),and/or declare bankruptcy.Typical reminder of a certain East West Airlines back in mid 90's and Damania Airways(same time).BOTH premium carriers of their times and both had had similar troubles and dues(such as ATF etc) just before closure!
Best part was that 3 days before ALL ops ceased,not a soul (even in managment)had even the slightest inkling of the doom that lay ahead.And even the then owners(a bunch of mafia goons and another,a master of shutdown) would come out with regular press appearances and fashion shows etc,claiming that all was well,whilst actually ALL WAS IN THE WELL!
VJM seems to be heading down the same exact cobbled but well trod pathway.....
He is after all just a buisnessman,and what do they do when buisness gets bad? Close the buisness....
Let the good times roll....!
Best part was that 3 days before ALL ops ceased,not a soul (even in managment)had even the slightest inkling of the doom that lay ahead.And even the then owners(a bunch of mafia goons and another,a master of shutdown) would come out with regular press appearances and fashion shows etc,claiming that all was well,whilst actually ALL WAS IN THE WELL!
VJM seems to be heading down the same exact cobbled but well trod pathway.....
He is after all just a buisnessman,and what do they do when buisness gets bad? Close the buisness....
Let the good times roll....!
Join Date: Jul 2005
Location: Somewhere between MSL and the Stratosphere
Posts: 231
Likes: 0
Received 0 Likes
on
0 Posts
Maybe he'll have to GIVE haircuts...!!!
After his airline goes down the cellar.Taking his alcohol buisness AND alcoholic friends down with him.Surely wont have any money left for a haircut.And to think he was trying to become another Richard Branson.Wish his father was alive......may god bless his soul...
After his airline goes down the cellar.Taking his alcohol buisness AND alcoholic friends down with him.Surely wont have any money left for a haircut.And to think he was trying to become another Richard Branson.Wish his father was alive......may god bless his soul...
Join Date: Nov 2008
Location: my home
Posts: 70
Likes: 0
Received 0 Likes
on
0 Posts
cuts baldies
Maybe he'll have to GIVE haircuts...!!!
After his airline goes down the cellar.
this VJM gave job to many.
but most at top have no hair ...saving day to day cost.
so VJM saves 50 rs for every body at top, each hair cut.
thats the price of one bottle of beer.
VJM will sell alcohal all arround the world,but
CUT some baldies to see airline some where...
not parked at the remotest location as dues are not paid....
same location of a/c"s as it was in 1990 with damania/east west .
i respect VJM for opening so much jobs...but his choices..
still some time, but now
good luck to all
and VJM
After his airline goes down the cellar.
this VJM gave job to many.
but most at top have no hair ...saving day to day cost.
so VJM saves 50 rs for every body at top, each hair cut.
thats the price of one bottle of beer.
VJM will sell alcohal all arround the world,but
CUT some baldies to see airline some where...
not parked at the remotest location as dues are not paid....
same location of a/c"s as it was in 1990 with damania/east west .
i respect VJM for opening so much jobs...but his choices..
still some time, but now
good luck to all
and VJM
Join Date: Mar 2009
Location: London
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
KFA
some good posts here, and some of you guys seem to know 'VJM' guess some of you known him well or have seen his VJM crest? He is a pompous ass.
Started as a budget airline then morphed into full service at budget fares, then bought Air Deccan foolishly, huge accumulated losses with all the mindless expansion and huge personal expenses. All his personal jets bills are also being paid for by KFA no doubt.
VJM is clearly going to drag a lot of people down when the airline goes belly up. Sad. He will most probably get away having stashed away his money and assets in private trusts like the Golden Eagle Trust in Switzerland!
Started as a budget airline then morphed into full service at budget fares, then bought Air Deccan foolishly, huge accumulated losses with all the mindless expansion and huge personal expenses. All his personal jets bills are also being paid for by KFA no doubt.
VJM is clearly going to drag a lot of people down when the airline goes belly up. Sad. He will most probably get away having stashed away his money and assets in private trusts like the Golden Eagle Trust in Switzerland!
Join Date: Mar 2009
Location: London
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
Join Date: Mar 2009
Location: London
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
KFA - Finances
It seems Vijay Mallya (VM) has taken on huge debt to fulfill his expansion plans. His Rs. 6900 crore debt story is as follows:
(a) Investment holding company of United Breweries Holdings (UBHL) has been used 81% of it stake in United Spirits (USL) as collateral to raise money for loss making Kingfisher Airlines.
(b) 27.8% of VM’s stake in UBHL has been used as collateral for loans for various purposes including KingFisher Airlines.
(c) USL has also pledged 17.2% of its shares to acquire Shaw Wallace and Whyte and Macay.
(d) Kingfisher Airlines has also used corporate guarantee to fund acquisition of Deccan Aviation.
(e) The pledges and corporate guarantees account for 44% of Uinted Spirits, VM’s flagship company.
According to VM’s statements, it seems that he is the only person with logic and that nobody should fear as these guarantees and pledges are top-up securities. I think the investors should think twice before investing in his companies because with share prices falling, VM maybe asked to give more top-up securities. Also, do we still know the complete story? I doubt it. For instance, what are the credit obligations of Kingfisher Airlines. At least, I know that he owes money to Pratt & Whitney, Rs. 1000 crores to oil companies and over Rs. 200 crores to Airport Authority of India. One also needs to find out if he is paying the vendors of his various companies in time.
Whenever you extend yourself beyond your means, you will end up into trouble. To get out of trouble you will start manipulating something or the other leading to corporate fraud. Once you have almost most of your assets on the line, then the temptation to do wrong also increases.
Fortunately for VM and USL stockholders, the oil prices came down substantially and improved the cash flows of Kingfisher Airlines. Also, VM used his influence to get certain benefits which eased the pressure on VM’s cash flows.
You know in such situations, the corporate honchos could be transferring money from one firm to another as inter-corporate loans. I feel that the interest of shareholders of companies from where funds are being transferred are also put at risk. I don’t know much about the regulations related to intercorporate loans but this is something that the government should look into.
I have stated in one of my posts that newspapers, especially business newspapers, have the obligation to its readers to analyze a particular issue a little bit in more detail and ask intelligent questions. Newspapers like The Economic Times was going ga ga over all these foreign acquisitions by Tatas, UB and others without asking where the money was going to come from. They have the ability to do indepth analysis but don’t. Similarly, all these newspapers have been going crazy about reporting the various new ventures and retail formats of Biyani without asking where the money is going to come from and also what happened to the ventures and retail formats announced earlier. I have been raising this question for quite sometime on my blog. Even in Satyam’s case, journalists should have asked where the money is coming from to purchase such a large land bank but nobody did?
We have heard the phrase, “Think before you leap.” Well, this is very appropriate if you are thinking of investing in Vijay Mallya’s ventures as of right now. And if I was running a business newspaper or its editor, I would keep an eye on Vijay Mallya’s company and maybe even launch a serious investigation to find out the financial situation of all his companies.
Avinash Narula
(a) Investment holding company of United Breweries Holdings (UBHL) has been used 81% of it stake in United Spirits (USL) as collateral to raise money for loss making Kingfisher Airlines.
(b) 27.8% of VM’s stake in UBHL has been used as collateral for loans for various purposes including KingFisher Airlines.
(c) USL has also pledged 17.2% of its shares to acquire Shaw Wallace and Whyte and Macay.
(d) Kingfisher Airlines has also used corporate guarantee to fund acquisition of Deccan Aviation.
(e) The pledges and corporate guarantees account for 44% of Uinted Spirits, VM’s flagship company.
According to VM’s statements, it seems that he is the only person with logic and that nobody should fear as these guarantees and pledges are top-up securities. I think the investors should think twice before investing in his companies because with share prices falling, VM maybe asked to give more top-up securities. Also, do we still know the complete story? I doubt it. For instance, what are the credit obligations of Kingfisher Airlines. At least, I know that he owes money to Pratt & Whitney, Rs. 1000 crores to oil companies and over Rs. 200 crores to Airport Authority of India. One also needs to find out if he is paying the vendors of his various companies in time.
Whenever you extend yourself beyond your means, you will end up into trouble. To get out of trouble you will start manipulating something or the other leading to corporate fraud. Once you have almost most of your assets on the line, then the temptation to do wrong also increases.
Fortunately for VM and USL stockholders, the oil prices came down substantially and improved the cash flows of Kingfisher Airlines. Also, VM used his influence to get certain benefits which eased the pressure on VM’s cash flows.
You know in such situations, the corporate honchos could be transferring money from one firm to another as inter-corporate loans. I feel that the interest of shareholders of companies from where funds are being transferred are also put at risk. I don’t know much about the regulations related to intercorporate loans but this is something that the government should look into.
I have stated in one of my posts that newspapers, especially business newspapers, have the obligation to its readers to analyze a particular issue a little bit in more detail and ask intelligent questions. Newspapers like The Economic Times was going ga ga over all these foreign acquisitions by Tatas, UB and others without asking where the money was going to come from. They have the ability to do indepth analysis but don’t. Similarly, all these newspapers have been going crazy about reporting the various new ventures and retail formats of Biyani without asking where the money is going to come from and also what happened to the ventures and retail formats announced earlier. I have been raising this question for quite sometime on my blog. Even in Satyam’s case, journalists should have asked where the money is coming from to purchase such a large land bank but nobody did?
We have heard the phrase, “Think before you leap.” Well, this is very appropriate if you are thinking of investing in Vijay Mallya’s ventures as of right now. And if I was running a business newspaper or its editor, I would keep an eye on Vijay Mallya’s company and maybe even launch a serious investigation to find out the financial situation of all his companies.
Avinash Narula
Join Date: Jan 2009
Location: India
Posts: 163
Likes: 0
Received 0 Likes
on
0 Posts
I think that when it ends it would not be pretty for KF & Mallya...
I am being told that Heineken NV (which holds 38% of UB group, Mallya 37.5%) have taken all their money from KFA back and Mallya has pumped in his personal money in the airline... And thats the reason they were unable to pay some of their dues on time...
Just hope that the airlines does well and stays afloat for the sake of hundreds of people working there...
I am being told that Heineken NV (which holds 38% of UB group, Mallya 37.5%) have taken all their money from KFA back and Mallya has pumped in his personal money in the airline... And thats the reason they were unable to pay some of their dues on time...
Just hope that the airlines does well and stays afloat for the sake of hundreds of people working there...