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Why did Kingfisher become bankrupt?

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Old 19th November 2011, 08:15 PM
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Question Why did Kingfisher become bankrupt?

can somebody pls explain why KF became bankrupt? what are the reasons for the losses? I also noticed on its balance sheet that it has negative reserves. is it possible for reserves to become negative? Also can KF be termed as a sick unit as per RBI's definition of sick units?



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Old 19th November 2011, 10:23 PM
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Default Re: Why did Kingfisher become bankrupt?

Quote:
Originally Posted by jxcess View Post
can somebody pls explain why KF became bankrupt? what are the reasons for the losses? I also noticed on its balance sheet that it has negative reserves. is it possible for reserves to become negative? Also can KF be termed as a sick unit as per RBI's definition of sick units?
Too much of drinking reduced productivity and lead to bar fights...! Bar fight lead to law suits...! Law suits lead to bankruptcy...!

Yaa...! RBI too thinks too much drinking can can make you sick...!
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Old 20th November 2011, 03:14 AM
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Default Re: Why did Kingfisher become bankrupt?

My two cnets.They have not been in profit for 16 quarters straight. Banks who lent out to them were given stake in return at Rs 64 / share. Now the stock is tradat 20-25 Rs level. With rising NPA's in banks affecting their stock prices, they do not want KFA to add to their woes.

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Old 21st November 2011, 11:11 PM
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Default Re: Why did Kingfisher become bankrupt?

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Originally Posted by jxcess View Post
can somebody pls explain why KF became bankrupt? what are the reasons for the losses? I also noticed on its balance sheet that it has negative reserves. is it possible for reserves to become negative? Also can KF be termed as a sick unit as per RBI's definition of sick units?
They were operating under heavy losses for a long time



Check out the company performance of Kingfisher Airlines for more details.
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Old 18th December 2011, 10:01 PM
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Default Re: Why did Kingfisher become bankrupt?

they haven't bankrupted yet ..first of all

they are facing sever liquidity crisis .

primarily the problem is in whole aviation industry whether it be Kingfisher , Indian Airlines or any other aviation company .

the problem is because of
1. Competition pushes them to keep their rates low
2. heavy taxes imposed by government .
3. Crude prices are relatively high .
4. Heavy parking / flying charger imposed by Airports authorities .
5. Heavy Debt in balance sheet.
6. Improper Management

Last edited by abhyudaya; 18th December 2011 at 10:28 PM.
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Old 18th December 2011, 10:10 PM
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Default Re: Why did Kingfisher become bankrupt?

If you don't mind these points should be in mind ( bold and colored)

Quote:
Originally Posted by abhyudaya View Post
they haven't bankrupted yet ..first of all

they are facing sever liquidity crisis .

primarily the problem is in whole aviation industry whether it be Kingfisher , Indian Airlines or any other aviation company .

the problem is because of
1. Competition pushes them to keep their rates low
They Must keep them in competition. Too much expense is not good. They provide the most luxurius air travel facilities. They must them low to be in market. Wrong company policy.
2. heavy taxes imposed by government .
Same for other Airlines too.
3. Crude prices are relatively high .
Same for other Airlines too. Global factors
4. Heavy parking / flying charger imposed by Airports authorities .
Same for other Airlines too. It is a true problem for every Airlines in India due to the childish behavior of Indian Govt.
5. Heavy Debt in balance sheet.
Who made this? Mallya alone. Cut the expense to make a strong balance sheet.
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Old 19th December 2011, 08:26 AM
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Default Re: Why did Kingfisher become bankrupt?

Kingfisher has become the past tense.
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Old 19th December 2011, 08:43 AM
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Default Re: Why did Kingfisher become bankrupt?

Quote:
the problem is in whole aviation industry whether it be Kingfisher , Indian Airlines or any other aviation company


I clearly stated that I was talking about whole industry not on the specific Company .
So I think we must make it a point to read twice before try and mock someone .

Sir Debarghya Mukherjee , Please accept my respect

I pointed out problem with whole industry due to which all the company are going through turbulence period .
and to be specific on AirIndia , Yes the financial position may be because of Government policies , upto an extent they are responsible but primarily the problem is with Aviation Industry . ( So its not the case with KF or AA even Jet is facing problems )
Take an example of American Airlines who filed for bankruptcy before some time .
Highly leverage balance sheet , relatively high cost of capital , low fares and high over head cost supported by improper management are the reasons .


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