India: Kingfisher Airlines Assets Auction Failed

In the year 2012, a global consultancy firm Grant & Thronton valued Kingfisher trademarks at Rs 4,111 crore or roughly $1 billion, when the airline’s license was suspended by India’s aviation regulator Director General of Civil Aviation (DGCA). The base price for the trademarks had been set at Rs 366.70 Crore. This subsequently concludes that the individuals/groups who would be interested in the auction must be having or be ready to start/incorporate their own airlines related business. The most relevant question to be raised here is “Who would be ready to invest on trademarks of defunct company?” However, there are precedents existing where Eastern Airlines, a now defunct airline major, went bankrupt and then its intellectual property was picked up by another airline company called New Easter Airlines in USA and commenced operation in mid-2015.

In fact Indian Banks passing loans against intellectual property for reputed and well-known brands is not a new form of practice. IP financing, or the use of IP assets (trademarks, design rights, patents and copyright) to gain access to credit, is gaining increasing attention in IP circles. Multinational corporations as well as small and medium sized enterprise, are leveraging their IP assets in exchange for finance, and lending institutions around the world are increasingly extending their business to provide loans on the basis of IP. Higher asset values may also help in negotiations with a company’s bank and facilitate access to credit, or help to negotiate cheaper interest rates on credits. Intellectual property though intangible but are always secured assets.

As far as Kingfisher is concerned, the brand has always been with glamour, vibrancy and lifestyle to the skies. The brand image of the parent Kingfisher brand gave further credibility to its marketing campaigns, featuring India’s then top models, but it seems that times have really hit hard ‘the King of good times’, as it is no longer seen as a positive association.