Kingfisher Airlines is No More

Wednesday, 24th April 2013 at 10:57am

Early last week, the Directorate General of Civil Aviation (DGCA) ordered the leasing companies to recover 15 planes from Kingfisher after they were removed from the registry. The government started the deregistration process more than two months ago.

The DGCA Secretary, K.N. Srivastava, ordered the planes' release to the lessors after the doomed airline failed to pay its obligations to them. Most of the aircraft ordered release were Airbus planes.

During the suspension order by the government in October last year, the airline had 40 planes in its fleet. Ten of the current planes under the possession of the airline are company-owned. The 15 planes ordered released were deregistered already and the remaining planes have been sold for parts.

The government may have succumbed to pressure from local carriers to expedite the process of deregistration of the leased aircraft. The lessors have been asking the government to help them recover their aircraft from the beleaguered airline in exchange, at least as a consolation, for the unpaid dues that the airline owed them.

The lessors have warned the government that the non-recovery of their leased aircraft from Kingfisher will greatly affect any similar deals with other Indian carriers in the future.

The non-release of the aircraft was called hostage-like by Henri Courpron, the chief executive of International Lease Finance Corporation (ILFC), in his interview early this year. ILFC is the world's largest aircraft-leasing company in terms of value. It has been trying its might to recover its aircraft it leased to Kingfisher after the troubled airline was ordered grounded and unable to pay its obligations.

With its failure to renew its license on the date of its expiry on December last year, Kingfisher looks like it is folding its wings for good.

To appease the flight crew and engineers, who were reportedly hatching a plan to spoil a cricket match of the Royal Challengers Bangalore, Mallya was quick to assure them that they will get their back pay for at least 8 months. Royal Challengers Bangalore is a team owned by Vijay Mallya, through his flagship company UB Group.

Forbes delisted him from its annual list of billionaires in 2012. The demise of his Kingfisher Airlines was blamed for the decline of his fortune.

The future of Kingfisher Airlines is not only bleak but uncertain following the recent deregistration of its planes and their subsequent release to their owners.

By: Pete Lee.