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INDUSTRY ANALYSIS PROJECT

Aviation INDUSTRY

Submitted to:

Director dr. dinesh d. harsolekar

Submitted BY:

SHWETA DESAI: ROLL NO.12

NEHA RAJE: ROLL NO. 24

VARSHA JEjARI: ROLL NO.30

SHRADDHA GOJE: ROLL NO. 42

ACKNOWLEDGEMENT
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Thank You is a very gratifying word. Every project is incomplete without expressing
grateful acknowledgements to the people who gave guidance and help throughout the
project.

First and foremost we would like to thank almighty for giving us the spirit to put in the
best efforts towards the project.

We are also thankful to Director Dr. Dinesh D. Harsolekar for giving us an opportunity to
let us go through the Aviation sector analysis.

INDEX

SR NO. TOPIC PAGE NO.

1 BRIEF ANALYSIS OF THE AIRLINE INDUSTRY 4
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2 FUTURE OF AVIATION INDUSTRY 6

3 TOP 5 COMPANIES IN THE AIRLINE INDUSTRY & THEIR 7

MARKET SHARE
4 CONTRIBUTION OF THE AIRLINE INDUSTRY TOWARDS 7
GDP
5 KINGFISHER AIRLINES
HISTORY OF KINGFISHER AIRLINES 9
ACHIEVEMENTS 11
MAJOR HAPPENINGS IN KINGFISHER AIRLINES OVER THE 12
LAST 4 YEARS
CONTRIBUTION OF KINGFISHER AIRLINES TO THE AIRLINE 12
INDUSTRY
REGULATORY CONTROLS 13
TECHNOLOGICAL DEVELOPMENTS IN KINGFISHER 16
AIRLINES
CSR ACTIVITY OF KINGFISHER AIRLINES 19
MERGERS & ACQUISITIONS 21
FDI’S FOR KINGFISHER 21
7 FINANCIAL ANALYSIS
RATIO ANALYSIS OF KINGFISHER AIRLINES &JET 22
AIRWAYS
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BRIEF ANALYSIS OF THE AIRLINE INDUSTRY

 Aviation Industry in India is one of the fastest growing aviation industries in the world.
With the liberalization of the Indian aviation sector, aviation industry in India has
undergone a rapid transformation. From being primarily a government-owned industry,
the Indian aviation industry is now dominated by privately owned full service airlines and
low cost carriers. Private airlines account for around 75% share of the domestic aviation
market. Earlier air travel was a privilege only a few could afford, but today air travel has
become much cheaper and can be afforded by a large number of people.
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 The aviation industry in India has two distinct sectors: Commercial and Military.
Commercial aviation includes passenger airlines and cargo planes, international air
services, air taxi and charter operations being their major functions. Military aviation is
comprised of the Indian Air Force and the aviation arms of the Navy and Army.

 Commercial aviation industry includes Airports, Airlines and the people working in
these. This article details Commercial Operations of airlines, jobs at the airport which are
largely administrative in nature, jobs with airlines both in flight and on the ground, and
lastly jobs with the technical wing which is involved in aircraft maintenance and
serviceability as well as the communication networks.

CIVIL AVIATION

COMMERCIAL AVIATION
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Some of the top employers of the industry are Air India, Indian Airlines, Jet Airways, Air
Sahara, Paramount Airways, Go Air Airlines, Kingfisher Airlines, Spice Jet, and Air Deccan.

 Kapil Kaul, CEO India & Middle East, Centre for Asia Pacific Aviation (CAPA), in an
interview said that India's civil aviation passenger growth is among the highest in the world.
“The sector is slated to cruise far ahead of other Asian giants like China or even strong
economies like France and Australia. The number of passengers who will be airborne by 2020 is
a whopping 400 million.”

FUTURE OF AVIATION INDUSTRY

The aviation industry is expected to grow at a compounded annual growth rate of 25% till 2010.
Also, by 2010 Indian airports will be handling between 90 and 100 million passengers per year,
as against the current 34 million passengers. It is expected that nearly 80% of this growth will be
driven by the low cost carrier segment (LCC). By 2008, the LCCs would capture 65% of the
direct on-line air ticket market from 61% in 2005.

International Domestic Total

No. in Percentage No. in Percentage No. in Percentage

millions growth millions growth millions growth

1999- 13.29 2.90% 25.74 6.90% 39.04 5.5%

00
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2000- 14 5.40% 28.01 8.80% 42.02 7.70%

01

2001- 13.63 (-)2.7% 26.36 (-) 5.9% 39.98 (-)4.9%

02

2002- 14.82 8.80% 28.9 9.60% 43.72 9.40%

03

2003- 16.65 12.30% 32.04 10.09% 48.69 11.40%

04

2004- 19.45 17.00% 40.1 25.00% 59.54 22.30%

05

TOP 5 COMPANIES IN THE AIRLINE INDUSTRY

1. Jet Airways.

2. Kingfisher.

3. Air India / Indian Airlines.

4. Spice Jet.

5. Indigo.

MARKET SHARE OF THE TOP 5 PLAYERS & OTHER PLAYERS IN THE AIRLINE
INDUSTRY
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CONTRIBUTION OF THE AIRLINE INDUSTRY TOWARDS GDP

The Role of Aviation Industry in India GDP in the past few years has been phenomenal in all
respects. The Aviation Industry in India is the most rapidly growing aviation sector of the world.
With the rise in the economy of the country and followed by the liberalization in the aviation
sector, the Aviation Industry in India went through a complete transformation in the recent
period.

Role of Aviation Industry in India GDP-Growth Factors

 The growth in the Indian economy has increased the Gross Domestic Product above 8%
and this high growth rate will be sustained for a good number of years

 Air traffic has grown enormously and expected to have a growth which would be above
25% in the travel segment

 In the present scenario around 12 domestic airlines and above 60 international airlines are
operating in India

 With the growth in the economy and stability of the country India has become one of the
preferred locations for the trade and commerce activities
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 The growth of airlines traffic in Aviation Industry in India is almost four times above
international average

 Aviation Industry in India have placed the biggest order for aircrafts globally

 Aviation Industry in India holds around 69% of the total share of the airlines traffic in the
region of South Asia

Role of Aviation Industry in India GDP-Future Challenges

 Initializing privatization in the airport activities

 Modernization of the airlines fleet to handle the pressure of competition in the aviation
industry

 Rapid expansion plans for the major airports for the increased flow of air traffic

 Immense development for the growing Regional Airports

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KINGFISHER: THE SECOND BEST IN THE AIRLINE INDUSTRY

HISTORY OF KINGFISHER AIRLINES

 Kingfisher Airlines Limited is a major Indian airline. Kingfisher operates more than 400
flights a day and has a network of 72 destinations, with regional and long-haul
international services. Kingfisher Airlines, through one of its holding companies United
Breweries Group, has a 50 percent stake in low-cost carrier Kingfisher Red, formerly
known as Air Deccan.

 Kingfisher Airlines is one of six airlines in the world to have a five-star rating from
Skytrax, along with Asiana Airlines, Malaysia Airlines, Qatar Airways, Singapore
Airlines and Cathay Pacific Airways. In May 2009, Kingfisher Airlines carried more than
a million passengers, giving it the highest market share among airlines in India.
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Kingfisher Airlines also has a strategic code-sharing agreement with Jet Airways, and an
alliance with the Hilton Hotels Corporation.

 The airline started operations on 9 May 2005, following the dry lease of four brand new
Airbus A320-200 aircraft. Its first flight was from Mumbai to Delhi.

 The airline ushered in a new era of luxury in India's domestic aviation sector with its
brand new aircraft with stylish red interiors, and smartly dressed crew and ground staff.
Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on
every seat even on domestic flights. All passengers were given a "welcome kit"
consisting goodies such as a pen, facial tissue and headphones to use with the IFE
system. Initially, passengers were able to watch only recorded TV programming on the
IFE system, but later an alliance was formed with Dish TV to provide live TV in-flight.

 On 3 September 2008 Kingfisher made its International debut by connecting Bangalore

with London. It plans to open up various new destinations in South Asia, Middle East,
Africa, Asia, Europe, North America and Oceania. Kingfisher also plans to create a
European hub at Amsterdam/Madrid for onward connections to various North American
Cities.

 On 13 October 2008, as a result of the worsening economic scenario and the resultant
drop in passenger traffic and increase in costs, Kingfisher chairman Vijay Mallya and his
Jet Airways counterpart Naresh Goyal announced a strategic alliance after a meeting in
Mumbai. The alliance was formed to implement code-sharing between the two airlines on
both domestic and international flights, joint fuel management to reduce expenses,
common ground handling, joint utilisation of crew and sharing of their frequent flier
programmes, namely King Club and Jet Privilege.
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Kingfisher Airlines Statistics

Year Ended   Passengers Carried   % Change   Average Load factor (%)  

April 07 - March 08 12,414,336 - -

April 08 - March 09 10,850,359 ▼12.6% 60%

ACHIEVEMENTS

Kingfisher Airlines has received three global awards at the SKYTRAX World Airline
Awards
- Named Best Airline in India / Central Asia; Best Cabin Crew – Central Asia
  Kingfisher RED named Best Low Cost Airline in India / Central Asia

NDTV Profit Business Leadership Award for Aviation"

- awarded to Kingfisher Airlines by NDTV twice in two years

" Voted as "India's Favourite Airline"

in a survey conducted by an independent research firm with 46% votes compared to 9Ws 23%

Rated as Asia Pacific's "Top Airline Brand"

in a survey conducted by TNS on 'Asia Pacific's Top 1,000 Brands' for 2008

"Brand Leadership Award"

in the service and hospitality segment against several acclaimed hotels, leading banks and other
airlines.

Kingfisher airlines won many more such awards and the list is endless.
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LAST 4 YEARS MAJOR HAPPENINGS AT KINGFISHER

 Purchase of Air Deccan through the Joint Venture Route i.e. started off as a Joint
Venture, merged and is now called Kingfisher Red.

 Kingfisher went international in 2008 using Air Deccan’s license to fly abroad.

 In late 2008, Kingfisher announced a “Strategic Tie Up” with Jet Airways.

CONTRIBUTION OF KINGFISHER AIRLINES TO THE AIRLINE INDUSTRY

 Kingfisher Airlines is India’s first and only 5-Star airline and the only one to offer a
premium first class. Besides being the first and only airline in India to offer in-flight
entertainment on every seat, Kingfisher offers LIVE TV with 16 channels of live and
exciting content. The airline has received numerous awards for innovation, customer
responsiveness and was voted the “Best New Airline of the Year”, within months of its
launch. This has made other players benchmark its class; thereby the industry is on a
major revamp.

 Also Airlines signed a contract with Airbus in December for four A320s and exercised
six options, making a total of ten aircraft on firm order. In addition, it will have options to
buy 20 aircraft and has placed fresh orders for 15 aircraft, including five A 380s at the
Paris Air Show.

 The Deccan-Kingfisher combine is the largest airline in Indian aviation connecting 69

destinations and operating over 570 flights daily with a fleet of 78 aircraft. Launched in
August 2003, Deccan’s affordable fares and value added facilities have created a niche in
Indian aviation and realized the aspirations of millions of Indians. Deccan presently flies
to 63 destinations nationwide with a fleet of 42 brand new aircraft and operates 350
flights daily. Following Deccan’s strategic alliance with The UB Group owned
Kingfisher Airlines, Deccan has embarked on a renewed phase of growth and
enhancement making itself the airline of choice for the metro and non metro traveler
alike.

 Kingfisher Training Academy (KTA) is all set to launch educational courses to prepare
India’s youth for new-age, fast growing careers in Retail, Hospitality, Aviation and
Customer Services Management sectors.

 The academy boasts of state-of-the-art training infrastructure, course modules based on

the evolving industry demands and a faculty of trained and qualified professionals that
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aim to create a world class training environment that imparts customized & quality
training to young aspirants in aviation, retail, hospitality and Customer Services
Management industries.

 For industries that have a continuous demand for trained service professionals, the KTA
is a gateway for aspiring youth to equip themselves with specific skill sets required for
the services industry. A significant part of the training is focused on the nuances of
appropriate behavior, norms & prevailing corporate culture.

 The KTA is backed by decades of insightful understanding of the evolving Indian

consumer and markets by the UB Group and will also strongly leverage on the success of
the multi-award winning Kingfisher Airlines that has redefined hospitality in the Indian
market.

KINGFISHER SUBJECT TO REGULATORY CONTROLS

THE DIRECTOR GENERAL OF CIVIL AVIATION (DGCA) is a statutory authority

working under the Ministry of Civil Aviation that oversees all issues regarding
airworthiness and licensing of personnel in India. It is the authority that issues licenses to
pilots and has many other important functions to oversee the safe and effective function of
air transportation in India.

REGULATIONS ARE AS FOLLOWS:

Section 1 – General

Series A - GENERAL POLICY & PROCEDURES ADOPTED BY DGCA

 Procedure for holding examinations, proficiency checks etc. for Defence personnel to
fulfill the requirements for grant of civil licences.

 Issuance of the Civil Aviation Requirements and revisions thereof etc. – Requirements to
be complied with.

 Procedure for an appeal on orders issued under Rule 3B of the Aircraft Rules, 1937.

Series B –

 Units of Measurements to be used in air and ground operations.

 Exemption procedure for non-compliances with Aircraft Rules.

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Section 2 – Airworthiness

Series A - PROCEDURE FOR ISSUE OF CIVIL AIRWORTHINESS REQUIREMENTS

AND RESPONSIBILITY OF OPERATOR VIS-A-VIS AIRWORTHINESS
DIRECTORATE

 Responsibilities of Operators/ Owners

 Procedure for CAR issue, amendments etc.

 Objectives and Targets of Airworthiness Dte.

 Airworthiness Regulation and Safety Oversight of Engineering Activities of Operators

Series B - APPROVAL OF COCKPIT CHECK LIST, MEL, CDL

 Minimum Equipment List (MEL)

 Preparation and use of Cockpit and emergency check list

Series C - DEFECT RECORDING, MONITORING, INVESTIGATION AND

REPORTING

 Defect recording, reporting, investigation, rectification and analysis 

 Flight Report - Recording of IN-FLIGHT instrument reading and reporting of flight

defect

 Reporting and rectification of defects observed on all aircraft except few

 Analytical study of in-flight readings & recordings

 Maintenance Control by Reliability Method

Series D - AIRCRAFT MAINTENANCE PROGRAMMES

 Reliability Programme (Engines)

 Aircraft maintenance programme and their approval 

 On-condition maintenance of reciprocating engines (Piston engines)

Series E - APPROVAL OF ORGANISATIONS

 Approval of organisation/ operators

 Approval of organisation - Cat. A – Manufacturers

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 Approval of organisation - Cat. B - Process Organisation

 Approval of organisation - Cat. C – Maintenance

Series F - AIRWORTHINESS AND CONTINUED AIRWORTHINESS

 Procedure relating to registration of aircraft 

 Procedure for issue/revalidation of Type Certificate of aircraft and its engines/propeller 
 Issue/validation and renewal of Certificate of Airworthiness 
 Suspension of Certificate of Airworthiness and its subsequent revalidation

Series H - REQUIREMENTS OF AIRCRAFT FUEL, REFUELLING OF AIRCRAFT

AND CALIBRATION OF AIRCRAFT FUELS

 Unusable fuel supply-calibration of fuel quantity gauge of aircraft

 Aircraft fuelling procedures 
 Aviation fuel at airport - Storage, handling and quality control

Series I - AIRCRAFT INSTRUMENT, EQUIPMENT AND ACCESSORIES

 Aircrafts instruments overhaul and periodical inspections

 Aircraft equipment and instruments 
 Maintenance of test equipment
 Ground Proximity Warning Systems (GPWS)

Series L - AIRCRAFT MAINTENANCE ENGINEER – LICENSING

 Issue of AME licenses, its classification and experience requirements

 Procedure of Examination for issue/extension of Basic license and Aircraft Maintenance
Engineer's license.
 Classification and certification responsibilities of AME's License for Helicopters
 Endorsement of AME Licenses

Series M - MANDATORY MODIFICATIONS AND INSPECTIONS

 Mandatory Modifications/ Inspections

Series O - OPERATIONAL REQUIREMENT FOR AIRCRAFT

 Minimum requirements to be complied with by operators

 Operation of Commercial Air Transport – Aeroplanes
 Operation of General Aviation – Aeroplanes
 Operation of Commercial Air Transport – Helicopters

Series R - AIRBORNE COMMUNICATION, NAVIGATION AND RADAR

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 Aircraft radio equipment

 Installation of Communication, Navigation and Radar equipment
 Maintenance of airborne communication, navigation and radar equipment 

Series S - STORAGE OF AIRCRAFT PARTS

 Storage conditions and storage/service life of rubber parts and aircraft components
containing rubber parts
 Fixation of Calendar period for determining overhaul life of reciprocating engines 

Series T - FLIGHT TESTING OF AIRCRAFT

 Flight testing of (Series) aircraft for the issue of C of A

 Flight testing of aircraft for which a C of A had been previously issued 

TECHNOLOGICAL DEVELOPMENTS IN KINGFISHER AIRLINES

1. iCargoNet to manage the Entire Cargo Business of the Airline

 Kingfisher Airlines, one of India's leading airlines has successfully started using IBS'
iCargoNet, Software as a Service (SaaS) version of IBS' new-generation airline Cargo
Management System (CMS), iCargoGold. iCargoNet now provides a unified, enterprise-wide
solution to help manage the entire cargo business of KFA, from planning, sales, operations,
ground handling (both inbound and outbound),Unit Load Device (ULD) management to
cargo revenue accounting and revenue optimization functions in an integrated and cost-
effective manner.

 The system enables the airline to use all the functionalities of a proven integrated CMS while
drastically bringing down the total cost of ownership. The implementation comes at a time
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when Kingfisher Airlines is seeking to grow its cargo business in the domestic market while
optimizing its cost of operations.

 The solution helps provide Kingfisher Airlines with the scalability to support their aggressive
growth plans and offers them the flexibility to adapt to the changing business needs of a
rapidly evolving market. iCargoNet will assist Kingfisher Airlines in ensuring the
profitability of its cargo business by enabling the airline to optimize the inventory of its
flights and monitor capacity utilization as well as the revenue generated by each flight as the
flight builds-up and before it takes off. IBS hosts the iCargoNet solution from its own world
class data center with the latest technology and support infrastructure that is managed by a
24X7 Customer Support Centre and network managed services. Being a SaaS, iCargoNet
facilitates customers to pay as they use the service.

2. Avionics, Auxiliary Power Units for India's Kingfisher Airlines

“Kingfisher Airlines will benefit from a common configuration of world-class technological

equipment on its present and future aircraft with optimized inventory management and
predictable maintenance costs,” said Mike Madsen, Honeywell Vice President of Airlines. “This
important partnership demonstrates Kingfisher Airlines’ confidence in Honeywell as a strategic
business partner.”

The Honeywell 131-9A APU is a small gas turbine engine that provides compressed air and
electrical power for main-engine starting and operation of aircraft systems on the ground or in
flight.

The selected Honeywell avionics systems for Kingfisher’s A320 family, A330 and A340 aircraft
include Enhanced Ground Proximity Warning System (EGPWS), Airborne Collision Avoidance
System (ACAS II), Weather Radar with Forward-Looking Windshear Detection, solid state
Flight Data Recorder (FDR) & Cockpit Voice Recorders (CVR), Quantum™ Line
Communications & Navigation System (CNS), Flight Management Systems (FMS) and Air Data
Inertial Reference System (ADIRS). Kingfisher also selected high speed Satellite
Communication System (SATCOM) on its A330 and A340 fleet.

3. Launch of AIRBUS A380

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The A380 will bring new standards of passenger comfort, and fuel efficiency to the Indian
aviation market. The A380 is truly a "green giant" with the lowest environmental impact of any
aircraft flying today or in the near future, with lower fuel consumption and lower noise Ever
since the launch of A380 Kingfisher Airlines has achieved a reputation for being an innovative,
superior service airline and has evolved into one of the most admired brands in the aviation space
worldwide.

Kingfisher Airlines deploys Autoland system to deal with fog

Kingfisher Airlines has created a new milestone in Indian Civil Aviation by becoming the first
private airline in India to receive certification to operate its flights in poor visibility using
sophisticated Auto land Systems in the highest category of operation-Category IIIA. This
development marks a significant step forward and is another effort in Kingfisher Airlines'
continuous commitment to on-time performance.

Since every single brand new Airbus aircraft in the Kingfisher Airlines fleet is equipped with
Autoland Systems capable of executing Category IIIA landings, all Kingfisher Airlines flights
operating into and out of fog-affected cities, like New Delhi, are capable of landing and taking
off in fog. Consequently, guests flying with Kingfisher Airlines will no longer be at the mercy of
fog related disruptions. Delays, rerouting and cancellation of flights due to fog will be greatly
decreased for all guests who fly with Kingfisher Airlines.
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One of the most critical aspects of commercial aircraft operations is the efficient and timely
interspersing of aircraft landings. A key factor in these operations is the ability of aircraft to land,
slow down, and taxi off runways. The challenges to efficient operations increase significantly in
low visibility conditions. Landing is the most critical moment and requires utmost prudence.

A Category IIIA approach allows aircraft to land with runway visibility as little as 200 m and a
Minimum Decision Height of 50 feet using Autoland Systems. Landing categories are broken
down by minimum cloud heights also known as the ceiling and the amount of horizontal
visibility. There is an internationally adopted scale of categories, which describes the landing
guidance system. Category I is the least demanding and Category II & Category III are
progressively more demanding in terms of the aircraft avionics, crew training and the quality of
ground equipment amongst other things. Planes are typically guided in safely by giving the
commander of the aircraft a landing approach flight path and an angle of descent.

BRIEF INFORMATION ABOUT KINGFISHER’S CORPORATE SOCIAL

RESPONSIBILITY

TheUBgroup-CorporateCitizen
The UB Group is known as a large USD 2.2 billion corporate conglomerate with business
interests ranging from spirits, beer, engineering, fertilizers and civil aviation to pharmaceuticals.
Few, however, are aware that UB is a silent crusader in the field of community services in its
own committed way. The Group has over the years emerged as a socially responsible corporate
citizen.
Its keen pursuit of activities in the field of Life Sciences has led to the setting up of a super
specialty hospital - Mallya Hospital at Bangalore. In June 1991, the Mallya Hospital was
inaugurated in the central business district of Bangalore in a multi-storied complex with
excellent medical equipment and best medical consultants. The hospital boasts of multi-specialty
disciplines and is the first such hospital in India to be awarded the ISO 9002 certification.
Subsidized health care is given to the under privileged class of society by providing a general
ward which is reserved for them.
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The Vittal Mallya Scientific Research Foundation

The Vittal Mallya Scientific Research Foundation was set up in December 1987, in memory of
the Group’s Founder, late Mr. Vittal Mallya. It has been actively involved with a mission called
“Science for Humanity” and is a non-profit organization participating with the Government in a
Public Private Partnership on various projects.

RESEARCHING WELLNESS OF LIFE

Established (1987), in memory of the Group's illustrious founder Mr. Vittal Mallya, its prime
objective has been laid to gain both newer and novel technologies that will have substantial
application in industry and health care.
Ably supported by The UB Group, it has established collaborative links with some reputed
research and academic institutions within the country and abroad. The Foundation is led by a
modest group of dedicated scientists trained in reputed institutions in India and abroad.

Towards Society

The Group’s commitment to the society is not restricted only to the city of Bangalore, but
outside of Karnataka as well. It has also provided an extensive drinking water scheme in
Srinivasapura village and has been actively involved in installation of Rain Water Harvesting
structures at their Palakkad brewery thereby providing drinking water to Ganeshpuram village,
Palakkad. Besides, there is an ongoing commitment to society by way of sponsorships of various
events which are organized by charitable bodies. The UB Group has rebuilt and renovated the
Cubbon Park Police Station, exactly a century after it was originally built as a guard room for the
statue of Queen Victoria.. The Group will continue its commitment to society for the betterment
of the community.
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MERGERS & AQUISITIONS

Kingfisher & Deccan aviation

 The boards of Kingfisher Airlines and Deccan Aviation decided to merge both the
airlines. The name of the merged entity will most probably be Kingfisher Airlines.

 In this manner, there will be no delisting of Deccan Aviation from the stock exchanges.
After the stock ratio is finalised, UB Holdings will have in excess of 51 per cent in the
merged entity.

 The new entity will start functioning from the next fiscal. The brand Deccan will
continue to remain.

 He said there were several areas where the two airlines could reduce costs and build-
down manpower through synergies. Hence technically it will be a reverse merger.

 Currently, the UB Group holds nearly 46 per cent stake in Deccan Aviation and fully
owns Kingfisher Airlines. In case of the merger, the UB Group will merge Kingfisher
Airlines with Deccan Aviation.

FDI’S BY KINGFISHER AIRLINES

Kingfisher exceeds FDI limit: Government

The discrepancy was pointed out by the finance ministry in the light of changes in foreign direct
investment (FDI) norms, as specified in Press Note II issued earlier this year

Private air-carrier Kingfisher Airlines has exceeded the foreign direct investment ceiling of 49%
as per the new FDI guidelines, which the company says could not be applied retrospectively. The
discrepancy was pointed out by the finance ministry in the light of changes in foreign direct
investment (FDI) norms, as specified in Press Note II issued earlier this year, while considering
the company’s proposal to raise Rs708 crore through fully convertible warrants. Prior to the
Press Note II, the FDI component in Kingfisher Airline was just 16.45%.Sources in the know
said that in view of the new guidelines the ministry is believed to have opined that the company
should either “divest or compound” to set things in order. He said “Kingfisher Airlines is
committed to raise equity and infusion of fresh capital will have collateral effect of diluting the
UB Group’s stake. Hence there is nothing inconsistent with our plans.”
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FINANCIAL ANALYSIS OF KINGFISHER AIRLINES

RATIOS OF KINGFISHER AIRLINES & JET AIRWAYS

AIRLINES KINGFISHER AIRLINES JET AIRWAYS

YEAR 2008 2009 2008 2009

Inventory - 5738.39 20.29 17.99

turnover ratio:

Debtors 46.67 41.01 11.31 9.23

turnover ratio:

Fixed assets - 2.85 0.75 0.91

turnover ratio:

ANALYSIS

1) Debtors T/O Ratio in 2009 of Kingfisher Airlines was 46.67 times and that of Jet
Airways was 11.31 times. So, kingfisher Airlines has a very healthy ratio as compared to
the Jet Airways as a larger ratio it is good for the company.

2) Inventory T/O Ratio of Kingfisher Airlines in 2009 was nil and that of Jet Airways was
20.29, in this case Jet airways has a healthy ratio as compared to the Kingfisher Airlines.

3) Fixed assets ratio in 2009 of Kingfisher Airlines is Nil and that of Jet Airways has
reduced it from 0.91 in 2008 to 0.75 in 2009, so it is not good for the company.