Kingfisher Airlines: losses, bank loans and a fugitive promoter

Growth and losses

• 9 May 2005: Kingfisher Airlines starts flying.
• 2 June 2007: Mallya buys the troubled low-cost carrier Air Deccan, which is later merged into Kingfisher.
• November 2009: the airline reports losses and lays off nearly 100 pilots.
• 25 November 2010: the board approves a debt recast package, with debt reported at over ₹6,000 crore.

The collapse

• March 2012: international flights stop, and daily flights fall to about 120 from more than 400.
• October 2012: a staff strike leads to a partial lock-out, and the airline's permit is suspended.
• 31 December 2012: the aviation regulator refuses to renew its permit, and the airline loses its licence to fly.

The lenders and the promoter

• A consortium of 17 banks led by SBI had lent to the airline. By 2019, the dues cited in court were about ₹9,000 crore.
• September 2014: United Bank of India declares Mallya and three directors wilful defaulters.
• 2 March 2016: Mallya leaves India, and his passport is revoked the next month.
• April 2017: he is arrested in London and released on bail. A UK court orders his extradition in December 2018, and the UK Home Secretary signs the order in February 2019.
• 5 January 2019: a special court in Mumbai declares Mallya a fugitive economic offender under the Fugitive Economic Offenders Act, 2018, the first person declared under that law.

• A business that never made money. Kingfisher reported losses year after year, yet kept expanding and borrowing.
• Debt recasts. A restructuring of loans within five years of launch showed the business could not service its debt.
• Acquisitions to grow, not to earn. Buying Air Deccan added routes and planes but also added losses.
• Unpaid staff. Delayed salaries and strikes are among the clearest signs of a cash crisis.
• Lending on the promoter's name. Banks kept lending largely on the strength of the group and the promoter's personal standing, not on the airline's cash flows.

• Lenders' governance matters too. The case raised hard questions about how banks assessed and monitored large loans to a loss-making company.
• Group strength is not a substitute for cash flow. A famous promoter and a strong parent group do not make a weak business safe.
• Watch for distress in operations. Unpaid salaries, unpaid taxes and grounded aircraft come before formal defaults.
• Legal tools have grown. The Fugitive Economic Offenders Act, 2018 and the wilful defaulter framework now give lenders and the state more power to act against defaulting promoters.