King Of Wishful Thinking
That’s probably the best way to sum up the beer baron whose ambitions of creating an airline for the masses seem bleaker by the minute.
Just because you can run a brewery does not mean you have overnight credentials to run an airline - Kingfisher Airlines is a classic example of just how quickly things can go wrong and makes the former Skybus business model look like a robust one, albeit without the backing of liquor money to prop it up.
“Kingfisher is an ersatz airline, the type of opportunist operation that sprints before it can crawl and for whom all learning-curves have to be taken at full throttle. Well, with the returned and unwanted A340s, indefinitely deferred A380s and vastly inflated A320 commitment, Kingfisher boss Vijay Mallya is fast discovering that running an airline is not like running a beer company and that no matter how much Airbus fawns over you, it takes more than words and ring-pulls to run a profitable airline today. This isn’t Scalextric, Vijay — those curves are real. And once you’re off the track, you’re out of business,” says Doug McVitie.
Pending approval, Kingfisher is gearing up for a slew of routes that must have rival airlines’ stomachs churning with hysterical laughter.
“I’ll take 5 of each please…“
Image courtesy of Airbus
Having struggled to get even 100-passengers on average between Bangalore and Heathrow, the Delhi/Mumbai-Heathrow sector is monopolised by Air India, British Airways, Jet Airways and Virgin Atlantic. If approval for Kingfishers flights is granted, expect either the DEL-LHR or BOM-LHR leg to be dropped within 6-12 months of starting.
As for the utterly laughable planned Delhi/Mumbai-Dubai run, Emirates probably cannot contain its glee. In simplistic terms, between Emirates and eventually FlyDubai, Kingfisher will be destroyed and decimated. It is certainly no coincidence that Emirates plans to deploy its carriage-cart A380’s to India from whom it derives its cheap labour for the UAE.
Mallya’s mid-April rush to get shareholders of his UB brewery group to essentially cross-subsidise one good business for a poor one shows that he still wants to remain in the airline game. Whether he’ll be there for the “long haul” (pardon the pun given Kingfisher Airlines plans falling flat on their face) is anyone’s guess.
“Vijay Mallya has been claiming he will raise $400 million for Kingfisher Airlines by parting with some of the stake,” said one Indian airline industry analyst recently. “He wants to raise this amount in a company that is valued in full at about $200 million. It is a joke.“
Kingfisher still owes millions to banks, creditors, airports and Jet Airways, along with a whole host of services that it continues to amass a handsome debt for with no sign of anything being paid back. ICICI bank has refused to lend any money to either UB Group or Kingfisher saying that “their credit is so poor, it’s not worth the paper it’s written on” and that “there are only so many zero’s you can add to debt before you wonder if even a single digit percentage will be paid back.”
Kingfishers order-fest of “five of everything” is equally bizarre - having sold A340’s it never even took delivery of and continually defers its A380’s points squarely at the fact that this carrier is on borrowed time and should be put out of its misery. Now. Yesterday even. It has no money to buy these airplanes let alone take delivery - it was exposed as bad buyer when it couldn’t even pay the leases on the now seized GECAS A320’s and now no one is willing to lend them money either for their fanciful “expansion” plans.
In a move that may seem trivial, pilots from the beleaguered Kingfisher are plying their trade elsewhere with Arab carriers such as Qatar Airways. We all know how “the snowball effect” can “snowball”.
The biggest victim(s) of Kingfisher’s ignorance are passengers and also the folks at Jet Airways who must be scratching their heads at why in the hell they ever sought a tie up with what is nothing more than an “also-ran” carrier. Yes, fine, Jet Airways has scaled back its operations; deferred airplanes etc etc, but is still a far more attractive proposition to investors than the overpriced gimmick its so-called code-share partner is worth.
With expansion plans that made the grandeur of the European Large Hadron Collider look like small classroom experiment, the fall from grace (did it ever have any?) of Kingfisher is a prime example of how not to do it.
“Under the influence” springs to mind…
26 comments July 16th, 2009
