Addendum
Indian court rules Kingfisher Airlines be wound up
December 1st 2016
In November, an Indian court ruled that V. J. Mallya’s Kingfisher Airlines be wound up after the bankrupt airline failed to settle a US$6 million debt with U.K. component supplier, Aerotron. Read More » A few days later, the government attempted to auction off Mallya’s private jet after attempts to sell it privately had been unsuccessful.
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The High Court of Karnataka, sitting in the state capital of Bangalore, handed down its decision on November 18, in response to Aerotron’s 2012 petition to wind up the airline. The ruling will pave the way for an official liquidator to take charge of the accounts and assets of the grounded premium domestic airline. Kingfisher Airlines never reported a profit in its operating life.
Liquor baron Mallya has refused to return from London, where he said he is living in “forced exile” to respond in person to the petition. From afar he has attempted to negotiate settlement of the billions in loans he owes to banks as well as unknown millions of dollars due to airports and governments in unpaid fees and taxes. So far, his terms have fallen far short of creditors’ demands.
Kingfisher Airlines was launched in 2005 as India’s supreme domestic carrier. Its flamboyant founder, the heir to a Indian drinks conglomerate, placed large orders for aircraft, including the A380, and bought struggling low-cost carrier, Air Deccan.
But the airline was not making money, especially as Mallya insisted continuing an expansion of the carrier’s network as fuel prices went through the roof. In October 2012, the airline’s staff took strike action. They had not been paid for months. Eight weeks later, Kingfisher’s operating licence was suspended and its aircraft were repossessed by lessors.
The Economic Times of India said the airline’s lenders, a 17-bank consortium, had taken control of the carrier’s remaining assets: its Mumbai offices, the Kingfisher brand and its slogan “Fly the Good Times”, Mallya’s private jet and his 12,350 square metre Goa villa. All were used as collateral against loans.
