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Kingfisher enigma fails to die in Media

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I fail to understand why everyone is after Kingfisher. In a day, in a time span of 30 minutes there are three news that appear.

One of them states that Airlines have mounted up debts because of Government Policies: Given the present conditions, many in media are debating whether India should have allowed 24% FDI and if they had done so, Airlines would not have been in debts. How in the world will that help is what I fail to understand? So that means Naresh Goyal wants to stack away majority of his airline stake in Mauritius and Vijay Mallya in Cayman Islands and avoid taxes in the country?

Agreed, state sales tax on Aviation turbine fuel (aka ATF) is proving to be very costly, what if the world crude oil prices were on the same level as today’s price minus the taxes? Will the airlines still rue the same fuel and taxes cry? The fact is that ATF prices are even cheaper than Petrol in India baffles me. I understand the fact that unlike our cars, an aircraft needs that in tons.

ATF Prices as on November 16, 2011 (per Kilo Liter)
Delhi 62310.33
Kolkata 70465.19
Mumbai 63228.40
Chennai 67018.04

Hire me! says Tony Fernandes of Air Asia.

The CEO of Southeast Asia’s largest airlines, Air Asia, Tony says the present condition of Air business in India because they lack focus. Frequent change of ideology from Full service to Low Cost, trying to do too many things at the same time has costed the loss they are making today. I think he is true up to a certain extent. He also says that in India, owners do not manage airlines like he does for Air Asia – which I think wont be true as Naresh Goyal and IndiGo promoters run their airlines.

There is also the view that Kingfisher should be saved and banks should convert its debt into equity at current market prices to take a stake of more than 51%. Once acquired, they can collectively sell that stake to an investor who can afford to pay the money banks ask for.

With so many of experts and no so experts popping up in media with their views, Kingfisher enigma will surely not fail in long time to come. Hail Media!

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2 Comments
  1. joelfernandes says

    the only reason KF is doomed is because of Mallyas egotistical image.hes trying to be the branson of india, which he will never be,branson was self made,,hes not. instead of starting small by wet leasing a few aircraft, mallya ordered 10 new A 380s at $380mn a piece!! the airline biz is the most volatile, thats y even the tatas and reliance havnt ventured into it.

    1. Hemal Shah says

      Joel, thank you for your comments. Though the aircraft order money needs to be paid on delivary of the aircraft, i still feel it was outrageous enough. He bought those for Kingfisher Red the LCC, but now that he is shutting down the LCC, I am not sure how that will be perceived.

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