By mid February of this year, Kingfisher Airlines started to sink into a fresh crisis. Several flights were cancelled and aircraft were grounded. The cash-strapped airline claimed that the disruptions would continue for four days due to unexpected events including bird strikes which rendered aircraft out of service.  The airline shut down most of its international short-haul operations and also temporarily closed bookings. Out of the 64 aircraft, only 22 were known to be operational by February 20. With this, Kingfisher's market share dropped to 11.3%.  

The cancellation of the flights was accompanied by a 13.5% drop in stock value. The CEO of the airlines, Sanjay Agarwal was summoned by the Directorate General of Civil Aviation and the Chairman CBDT to explain the disruptions of the operations. In March 2012, the airline was suspended by the International Air Transport Association from using its inter-airline fund clearing system, the suspension meant the airline would have to deal directly with other airlines when sharing revenue on services.  

Due to the ongoing financial crisis, an Airbus A330-200 aircraft was impounded at London Heathrow Airport in the United Kingdom under Court Orders due to unpaid fees to aircraft leasing companies and RBS. In June 2012, GVK, India's second-largest airport operator launched legal proceedings against Kingfisher Airlines, as a series of checks issued by the airline, bounced.