Troubled Kingfisher seeks help
This is one of the many times Oil marketing companies have refused fuel to troubled Kingfisher airlines. In the past, they have done and they are doing it now too. The airline is pretty much grounded with 50 to 100 cancellations. I wonder how other airlines are able to cope up.
Vijay Mallya, the face of Kingfisher has even gone out of his way to seek help from government which has assured him of considering any sort of help possible, however not a bailout. I don’t think Kingfisher deserves a financial bailout but yes, any assistance other ways should be considered thinking of the fate of many employees who are at the risk of losing their jobs. It is the last thing aviation industry wants to see. As well, Kingfisher has sought to import fuel directly and use it for its airline operations. Hmm, that way he can save state taxes? I need some law people to help me understand how?
Having keenly observed the rise of aviation industry, a correction was due and airlines started responding by increasing the prices where possible and then seeking independence in pricing strategy from government. Mandates to fly non-profitable routes from government is hitting all airlines badly given the constant raise in the fuel prices. Plaguing issues like depreciation of rupee making expenditure in US Dollar or Euro terms even more costly.
I don’t think media has the right to sensationalize the issue linking up personal lifestyle of Vijay Mallya. He is the face of the airline, which doesn’t mean he is the only one running the airline. And the state of Indian aviation does not paint a rosy picture at the same time. Linking up to personal lifestyle is like linking up our Politicians to their chairs. Politicians cannot lavish on tax payers money and neither should.
Yes there are airlines which posted profits, like IndiGo. And if anyone asks me personally, I would like to Fly Kingfisher than IndiGo for the pure lure for luxury and something I could afford. After gobbling up Air Deccan and turning it into a Frills Low cost airline, Kingfisher Red, what Mallya has done is to give luxury to middle class. If Captain Gopinath has given Indians an airline to simply fly, Mallya gave it luxury.
I don’t align with the theory of Mallya’s decision to shut down Kingfisher Red. One business where you have volumes, where you have more opportunities to cut costs, gets much better efficiencies. Extracting profits, leveraging your prime slots, get back to the fight with medium fares to low fares. If I was in Mallay’s shoes and I had to shut down Kingfisher Red, I would have done that differently.
I would have brought back Captian Gopinath and ask him to manage this business separately with keeping 51% stake for myself and giving rest of the 49% for his company. And from the money I gain from the sale of 49% stake, I would have bailed out my airline. Or Captain Gopinath would not agree, I would have gone for someone else who is able enough.
From the recent news I hear, Kingfisher is in talks with an Indian Company for a stake sale. Yay, why did it took so long?