A CASE STUDY Vijay Mallya: King Of Good Day came to Shutdown
Overview of the case study:
Kingfisher airline has started its airline service in May 2005, investors also faith on Vijay Mallya as he is running United Beverages Group (kingfisher Beer) successfully. After acquired of Air Deccan and started international flight services in 2008. After running four years of International flight services Kingfisher stopped its International airline services because of huge debt, it was not in a position to pay back the employee’s salaries, airport charges, fuel bills to the oil companies, bank loan payments, & other reasons too for the shutdown of Kingfisher airline. On 20 Oct, 2012 the Director General of …show more content…
Vijay Mallya acquired Air Deccan in 2008 just for the sake of expansion its business in International arena without having much experience of International competitor. These acquisition is made just to get International route licensed (5/20 rule). After acquiring Air Deccan, Vijay Mallya has to faced a loss of over Rs1,000 cr. For the consecutive three years because it was not the correct time to acquired civil aviation. During that period of time civil aviation faced the worst economic turn period in its history. G.R. Gopinath co-owner Air Deccan, who was looking for a buyer for his airline and made a tie up with Anil Ambani(Reliance Group) but at last minute Vijay Mallya made the deal by offering more money then Anil Ambani. After completing all the necessary of acquisition and approved by the SEBI. Soon after completing all the due process acquisition. Kingfisher stepped into the International routes, ever since the Kingfisher airline commenced operation in 2005, it has been reported losses. By early 2012, Kingfisher airline has faced a accumulated loss of 7,000 cr. It fine difficult to pay back employee’s salary in time which lead its employee’s go on strike and force to cancel its flight …show more content…
Vijay Mallya expressed his concern for the employees while sending a letter addressing to all people who are working with Kingfisher. Expressing his helplessness, Vijay Mallya , who was once known as the King of Good Times, claimed that the company was not in the condition to pay back its employee salary because many of the bank accounts have been frozen by the Income Tax Authorities in July 2011, Hindustan Petroleum Corporation Ltd. (HPCL) stopped supplied of fuel for non- payment of dues amount. As on Jan, 2012 Kingfisher airline has service tax arrears of Rs60 Cr. By Feb, 2012 Kingfisher has been declared as non-performing asset (NPA) by SBI, Bank of Baroda, PNB, IDBI, Central Bank & BOI. Kingfisher airline has a accumulate debt of Rs8030 Cr.
The airline has forced to shut down its operation on 20 Oct, 2012 by the DGCA and suspended its flight certificate. It was because of Kingfisher airline failure to give an effective response to the show –cause notice issued by the DGCA. After withdrawal of both domestic & international flights services on Feb 2013. Later, CEO of Kingfisher airline resign from his post on 17 Feb, 2014.
Vijay Mallya, once known as the “King of Good Times” for his flamboyant lifestyle, sold his shares in United Spirits to Diageo. Diageo, has agreed to pay $75 million (Rs515 Cr.) to Vijay Mallya in consideration for his resignation and termination
Overview of the case study:
Kingfisher airline has started its airline service in May 2005, investors also faith on Vijay Mallya as he is running United Beverages Group (kingfisher Beer) successfully. After acquired of Air Deccan and started international flight services in 2008. After running four years of International flight services Kingfisher stopped its International airline services because of huge debt, it was not in a position to pay back the employee’s salaries, airport charges, fuel bills to the oil companies, bank loan payments, & other reasons too for the shutdown of Kingfisher airline. On 20 Oct, 2012 the Director General of …show more content…
Vijay Mallya acquired Air Deccan in 2008 just for the sake of expansion its business in International arena without having much experience of International competitor. These acquisition is made just to get International route licensed (5/20 rule). After acquiring Air Deccan, Vijay Mallya has to faced a loss of over Rs1,000 cr. For the consecutive three years because it was not the correct time to acquired civil aviation. During that period of time civil aviation faced the worst economic turn period in its history. G.R. Gopinath co-owner Air Deccan, who was looking for a buyer for his airline and made a tie up with Anil Ambani(Reliance Group) but at last minute Vijay Mallya made the deal by offering more money then Anil Ambani. After completing all the necessary of acquisition and approved by the SEBI. Soon after completing all the due process acquisition. Kingfisher stepped into the International routes, ever since the Kingfisher airline commenced operation in 2005, it has been reported losses. By early 2012, Kingfisher airline has faced a accumulated loss of 7,000 cr. It fine difficult to pay back employee’s salary in time which lead its employee’s go on strike and force to cancel its flight …show more content…
Vijay Mallya expressed his concern for the employees while sending a letter addressing to all people who are working with Kingfisher. Expressing his helplessness, Vijay Mallya , who was once known as the King of Good Times, claimed that the company was not in the condition to pay back its employee salary because many of the bank accounts have been frozen by the Income Tax Authorities in July 2011, Hindustan Petroleum Corporation Ltd. (HPCL) stopped supplied of fuel for non- payment of dues amount. As on Jan, 2012 Kingfisher airline has service tax arrears of Rs60 Cr. By Feb, 2012 Kingfisher has been declared as non-performing asset (NPA) by SBI, Bank of Baroda, PNB, IDBI, Central Bank & BOI. Kingfisher airline has a accumulate debt of Rs8030 Cr.
The airline has forced to shut down its operation on 20 Oct, 2012 by the DGCA and suspended its flight certificate. It was because of Kingfisher airline failure to give an effective response to the show –cause notice issued by the DGCA. After withdrawal of both domestic & international flights services on Feb 2013. Later, CEO of Kingfisher airline resign from his post on 17 Feb, 2014.
Vijay Mallya, once known as the “King of Good Times” for his flamboyant lifestyle, sold his shares in United Spirits to Diageo. Diageo, has agreed to pay $75 million (Rs515 Cr.) to Vijay Mallya in consideration for his resignation and termination