“The King of Good Times’ was hit by one crisis after another in 2012. A series of events that led saw half the fleet of KFA grounded and several members of its staff going on strike. To make matters worse the company’s aircraft was impounded and the it lost its licence for failing to address the Indian regulator`s concerns about its operations.
Ever since the airline commenced operations in 2005, it has been reporting losses. The cash-strapped airliner shut down most international short-haul operations and also temporarily closed bookings.
State Bank of India, the lead lender to KFA, also contemplated stopping further loans to it unless and until the airliner came up with a new equity by itself. Political activists also claimed that bailing or helping a private airline would lead to problems within the government. Crisis deepened further when the CBDT of India froze many more Kingfisher accounts as it was unable to pay all the dues as per schedule.
In the latter half of the year, an arrest warrant against Chairman Vijay Mallya was issued and a non-bailable warrant in a case of cheques bouncing filed by GMR Hyderabad International Airport Ltd. However, the company’s stock has showed some positive signs boosted by reports of a possible deal with Etihad Airways.