Why did Kingfisher become bankrupt?

Discussion in 'Beginners Guide' started by jxcess, Nov 19, 2011.

  1. jxcess

    jxcess Active Member

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    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?
     
  2. linkon7

    linkon7 Well-Known Member

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    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...!:lol:
     
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  3. gd.shepherd

    gd.shepherd Member

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    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.

    Shepherd
     
  4. aryan.

    aryan. Active Member

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    They were operating under heavy losses for a long time

    [​IMG]

    Check out the company performance of Kingfisher Airlines for more details.
     
  5. abhyudaya

    abhyudaya New Member

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    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: Dec 18, 2011
  6. Debarghya Mukherjee

    Debarghya Mukherjee Well-Known Member

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

     
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  7. juneeci

    juneeci Member

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    Kingfisher has become the past tense.[​IMG]
     
  8. abhyudaya

    abhyudaya New Member

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    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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