Kingfisher Airlines:

Rise and Fall

Introduction
Kingfisher Airlines was an Indian airline
founded by Vijay Mallya in 2003. The airline
quickly gained popularity for its luxurious
amenities and high-end service, but
ultimately faced financial struggles and
ceased operations in 2012. This presentation
will explore the rise and fall of Kingfisher
Airlines, examining the factors that
contributed to its success and ultimate
downfall.
The Rise of Kingfisher Airlines

Kingfisher Airlines was founded in 2003 by

the Indian businessman Vijay Mallya. It
quickly rose to become one of the leading
airlines in India, known for its luxurious
amenities and top-notch service.

The airline's success was due in part to its

aggressive expansion strategy, which
included the acquisition of several other
airlines and the launch of international
routes.
Expansion and Acquisition
Kingfisher Airlines expanded rapidly in its early years, acquiring Air Deccan in 2007 and starting international flights
in 2008. The airline also placed large orders for new aircraft to support its growth.

Acquisition of Air Deccan International Flights

Kingfisher Airlines acquired Air Deccan in
2007, which was India's first low-cost carrier.
This acquisition was a major step in
Kingfisher's expansion strategy, as it allowed
the airline to access new routes and
customers.
In 2008, Kingfisher Airlines started international
flights to destinations in Asia, Europe, and
North America. This was another important
step in the airline's expansion strategy, as it
allowed the airline to tap into new markets and
increase revenue.
Financial Troubles
Kingfisher Airlines faced a number of financial
troubles that ultimately led to its downfall. One
major issue was the high level of debt the airline
had accumulated. By 2012, the company had a
debt of over $1 billion and was struggling to
make loan payments. In addition, the airline had
been losing money for several years and was
unable to turn a profit. This was due in part to
the high cost of fuel and the intense competition
in the Indian airline industry.

Two Majors Factors

Employee Payment Woes
Investor Confidence Decline
 I
I

able l: Exposures of Banks on Loans Disbursed toKingfisher Airlines

, Company ;fer Exposure as on Share in Recovery as Total Exposure Losses Recoveryin Loss(adjusted)
31Jan 2014 Exposure Estimated (adjusted) (adjusted} Worst-case inWorst-case
'

bySBI (See note) as perSBI Scenario Scenario

Memorandum
State Bank of India 1,874.66 27.0% 288.81 1,201.19 912..38 41.45 1,159.74
885.64 12.7% 136.42 567.39 430.97 19.58 547.8. 1
Punjab National Bank 815.08 11.7% 125.49 521.93 396.44 18.01 503.92
Bank of India 666.13 9.6% 102.56 426.55 323.99 14.72 411..83
Bank of Baroda 639.89 9.2% 98.59 410.05 311.46 14.15 395.91
entral Bank of India 448.53 6.4% 69.01 287.04 218.02 9.90 277.13
United B.ankof India 415.02 6.0% 63.87 265.64 201.77 9.17 256.48
351.2 5.1% 54.12 225.08 170.97 7.77 217.32
orporation Bank 312.98 4.5% 48.22 200.57 152.35 6.92 193.65
State Bank of Mysore 169.06 2.4% 26.04 108.31 82..27 3.74 104.57
Indian Overseas Bank 157.02 2.3% 24.22 100.73 76.51 3.48 97.25
Federal Bank 102.3 1.5% 16.07 66.86 50.78 2.31 64.55
Punjab and Sind Bank 62.14 0.9% 9.54 39.67 30.13 1.37 38.30
xis Bank 56.32 0.8% 8.68 36.10 27.42 1.25 34.86
onsortium Total 6,955.97 100.0% 1,071.64 4,457.11 31385.47 153.79 4,303.32
II figuresin rupees crore.
2 1
Adjusted" indicates reduced exposure based on SBI memorandum.
orst case scenario refers to SBI losing both theclaim over <651 crore and being unsuccessful at selling KFA trademarks.
Grounding of Fleet and Suspension of Operations

Operational Crisis
Market Share Decline
Potential Investor Interest
Lender's Stance
Impact on Indian Aviation Industry
The rise and fall of Kingfisher Airlines had a significant impact on the Indian aviation industry. The
airline's aggressive expansion and luxurious branding initially created a buzz in the market, but its
eventual downfall had far-reaching consequences.

Decreased Competition
Negative Image
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 Lessons
Learned
2. Poor management 3. Customer service
1. Overexpansion can sink a company is crucial for
can lead to financial success
ruin
Conclusion
Kingfisher Airlines started off really well but
ended up failing due to money problems,
difficulties running the business, and economic
challenges. Its story teaches us how important
it is for companies to make smart choices,
manage money wisely, and be flexible in a
tough industry like aviation. Learning from its
ups and downs, we can understand how vital it
is for businesses to plan carefully, handle
money responsibly, and adapt to changes to
stay successful.