Kingfisher Airlines License Suspended by the Indian Government
Tuesday, 30th October 2012 at 01:01am
The end was imminent for Kingfisher Airlines when the Indian government suspended its license on October 20 after violence erupted following weeks of protest staged by its employees over unpaid salaries since March this year.
Minister Ajit Singh of India's Civil Aviation told reporters that the suspension was necessary to protect the travelers who might get caught in the crossfire. Besides, the airline was already unable to keep its planes serviced and maintained as most of its engineers were not reporting to work.
The airline was forced to cancel all its flights early this month and was unable to resume regular operations since then. Kingfisher used to be the country's second largest carrier until early this year when it plunged to financial crisis.
Based on estimates by an industry research firm, Centre for Asia Pacific Aviation, its outstanding debt stands at $2.5B, including an unpaid bank loan of $1.1B. It has also accumulated losses amounting to $1.9B as of June 2012.
The embattled airline has ceased selling tickets and was trying to negotiate with its own engineers and pilots, who joined the strike, to return to work.
Prior to the cancellation of its license, the court of Hyderabad issued an arrest warrant against its beleaguered owner, Vijay Mallya, over bounced cheques, worth over 100 million rupees, that he reportedly issued to the local airport operator. The amount was meant to service its debt that the airline had accumulated over the years.
Vijay Mallya lives an extravagant lifestyle and his countrymen know it well. He keeps a company of famous celebrities and personalities including young fashion models and throw lavish parties for his friends such as Bollywood stars and cricket players.
Aside from Kingfisher Airlines, he also owns the business conglomerate, United Breweries Group, which is currently the largest producer of beer in India. Other than aviation and beverages, the UB Group has interest in other major industries such as chemicals and fertilizers, engineering, information technology and pharmaceuticals. Furthermore, he also owns majority stakes in Force India, a Formula One team as well as Royal Challengers Bangalore, a cricket team.
By: Pete Lee.