Kingfisher Doomed!!

Discussion in 'Economy & Infrastructure' started by Godless-Kafir, Mar 7, 2012.

  1. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    Kingfisher Airlines crisis worsens, oil companies stop fuel supply



    Kingfisher Airlines crisis worsens, oil companies stop fuel supply - Business News - IBNLive

    My question is, even after the government knew that Avation fuel in India is the most expensive, even compared to US and Europe, they never reduced the price. They just watch their industries chock and struggle instead. I being in textile industry payed huge taxes this year even when the whole Industry is struggling because of recession and low power availability. They take the money and some minister will eat that Tax money and nothing will be built, instead if the money was with us we could have done better this year to with stand the storm. Why take it and waste it in heavily leaking system?

    Why are they doing this knowingly? WHy that [edited] is so deaf and stupid that they still stick to socialist ways or is it plain stupidity. I feel so so frustrated being a business man now a days. :mad:

    [MOD Edit: Are you totally incapable of using decent language? This is for the umpteenth time!]
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Rather unfortunate.

    Their inflight courtesies were real good!

    And I am not talking of Kingsisher Red.
     
  4. SPIEZ

    SPIEZ Senior Member Senior Member

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    I wanna buy some of their Air hostesses :troll:
     
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  5. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    Ya they are the best and are hand picked by mallaya;)
     
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  6. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    The question here is GOI knew the high aviation fuel price is what is killing the industry. Yet they did nothing, they simply watched, he did not ask for bail out package. He wanted the fuel be priced the same as other countries, they did not.

    Even Jet Airways is in huge debt and will declare with in this year, what have we left? This going down like Assam tea industry.
     
  7. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    How can they do that if they are going to continue their doll out useless subsidies. CONs are not bothered by few thousand jobs as long as they cangive away freebies to lakhs more! Fu(k the CONs and all problems will be solved:namaste:
     
  8. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    This is no good for French aerospace. Kingfisher runs on leased Airbus'.
     
  9. Blackwater

    Blackwater Veteran Member Veteran Member

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    Aurat vinash ki janani ha.

    [​IMG]
     
  10. trackwhack

    trackwhack Tihar Jail Banned

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    When ramp models take precedence over pilots and planes, an airline deserves to be doomed. I've heard Mallaya meets each and every stewardess personally before she is hired, I know from someone who was interviewed for the role. Is that what a CEO is supposed to do? Yes marketing is important but KF is a classic case of buffoonery.

    The clown inherited a bucket load of cash from his pop that he used to buy up stuff just as the economy was opening up which gave him a nice headstart. Now he is being outclassed by serious entrepreneurs who know how to run a business. Look at the competition, everyone is struggling but only KF is sinking.
     
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  11. Daredevil

    Daredevil On Vacation! Administrator

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    It might be possible that this buffoon be kicked out of Kingfisher board and make other competent people run it effectively a la Mahindra Satyam.
     
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  12. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    I dont care if he sleeps with each and every girl. That is not what makes a man good or bad, it is GoIs fault for creating an unfair play ground for Avation in India.
     
  13. trackwhack

    trackwhack Tihar Jail Banned

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    What are you talking about? Regardless of policy, there are airlines making profit and others making losses but none of them are going under. Most of the loss making airlines are doing so due to huge initial capital expenditure.

    I dont care how many women anyone sleeps with, but Mallaya has his priorities wrong if one of his tasks is to interview his stewardesses.
     
  14. addiction

    addiction Regular Member

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    Rules of the game were there since beginning...if u don’t know how to play while complying with rules, you should not play that game….now when u see yourself at losing end, you are crying about policies/rules whatever you call it! ..Doing white collar business in competitive environment with glamour around it is not as easy as selling liquor in this country! ..
     
  15. devgupt

    devgupt Regular Member

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    High cost of jet fuel is an issue , but it not the sole reason for Mallaya's failure.

    Its not that all airlines are failing . Indigo is posting profits quarter after quarter.
    Mallya took over Deccan Airlines when Deccan was making profit .
    And today both Kingfisher and Kingfisher Red are in deep RED.

    The blame squarely lies on Mallaya's mishandling of airlines
     
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  16. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    A very good take by Capt. Gopinath on the issue. High time KFA was converted into a professionally run set up, before this company goes bust. Its the GoI's call.

    Banks should convert their debt into equity, remove Vijay Mallya to save Kingfisher Airlines: GR Gopinath - Economic Times

    - GR Gopinath


    The banks, aircraft lessors, government and the two airlines -Kingfisher and Air India - are finding themselves between a rock and a hard place. In the case of Air India, voices are being heard that it is a government-owned airline so the government being the owner can do what it wishes, implying scant regard for public money, and that misdemeanours or mismanagement can be overlooked. Whom do they hang any way? There are IAS CEOs who are transferred to plum postings after their tenure in Air India as they build a good 'network' during their stint and reciprocation is expected and accepted.

    And to be fair, you can't hold them responsible and accountable as there are systemic problems in the organisation with political interference. There were outstanding CEOs from IAS who did an excellent job when the organisation they were serving were privatised and they were made accountable to deliver - to name just two - Jagdish Khattar of Maruti Suzuki and P J Nayak of Axis Bank built great businesses. Kingfisher Airlines is another matter.

    When Vijay Mallya asked for a bailout from government, Rahul Bajaj said it will be "privatisation of profits and socialisation of losses".

    The Kingfisher chairman's flamboyant lifestyle does him no favours either when he goes abegging for a bailout. Selecting exotic destinations to shoot hot models for calendars, owning Formula-1 car-racing teams and Twenty20 cricket franchises, publicising his party-going, etc, are points that will be raised against him in case taxpayers have to save the airline. There is already an increasing chorus against a bailout. Mallya had this to say in his defence, "I pay my taxes and I owe no one any apology for my lifestyle."

    To be sure, Mallya might be prompt in filing his personal income-tax returns. But when over Rs 400 crore of taxes are not paid, and dues in excess of Rs 2,000 crore in addition to unserviced bank debt are owed to vendors, and close to half the airline's fleet is on ground for more than two years for want of parts, and you are buying exotic islands, villas and yachts around the world when your empire is burning, it is bizarre and reminds you of the famous Ray movie Shatranj ke Khiladi. But you can redeem yourself by humility, accepting the blunders and be a man and take the hit on the chin, pay the price and move on.

    What can the government and banks do? Punishing Kingfisher Airlines for their rage against Mallya is like cutting your nose to spite the face. With over 10,000 employees and close to Rs 10,000 crore of bank and vendor debt, Mallya is no more Kingfisher than Air India is India. The government must be decisive and move with speed. The banks must convert Kingfisher debt into 100% equity at market value, which means they will recover only fraction of their debt, and must recover the balance, whatever possible, through sale of mortgaged shares and assets of the promoter and his holding company.

    Also, they must wrest complete control of the airline from the profligate promoter who ran amok and appoint a board that, in turn, can hand it over to professionals, stabilise operations and, at a right time, sell it to new investors. This will save jobs and assets, that will deteriorate in no time and, most vital, if the organism disintegrates, it will be difficult to breathe life back and the value of a lot of intangible assets will vanish in a jiffy. Most important, it will ensure a sudden vacuum is not created in the airline sector, creating a huge imbalance in demand and supply and hitting air travel with soaring prices and cartelisation.

    Creating lost capacity with new airline entrants will take 4-5 years. If the US, the symbol of capitalism and free market, could do it in case of General Motors, Ford and iconic banks like City Bank, and if recently we had a successful, smooth and quick restructuring and transfer of ownership of Satyam Computers, it can be done in the case of Kingfisher too. Allowing bankruptcy of Kingfisher, which looks inevitable, the banks will anyway lose everything and cause grief to employees and hundreds of small vendors who may also, in turn, go bankrupt.

    Air India, the other liability of the government, deserves a dispassionate assessment and move towards privatisation, ensuring employees are taken care of. British Airways, Lufthansa and Quantas, to name a few, which were national carriers

    and on the verge of bankruptcy and beset with similar ailments and problems of trade union opposition, etc, were successfully privatised without causing trauma to workers. In the case of British Airways, it was privatised over eight years. It can easily be done without causing panic and layoffs and is easier than solving the Kingfisher mess. Unlike Kingfisher, Air India has huge assets in land, building, engineering, bilateral grandfather rights, slots, extensive network and a powerful brand with fond nostalgia.

    It is in no different state that British Airways or Lufthansa were when they were privatised two decades ago. Hive off all of Air India's land, buildings and assets across the country into a separate entity, and from its sale, compensate employees with a golden handshake. The money that the government will realise from that sale will probably leave some extra cash in the treasury as Air India holds prime family silver. The airline can then be completely privatised with sustainable debt and a lean airline with operational assets necessary to run the airline will be an attractive proposition for buyers. This will stop continued bleeding and, on the contrary, government will benefit from annual revenue as against loss, as in the case of Maruti Suzuki.

    I am saying bleeding will continue because nothing has changed structurally and Air India, the way it is managed, is inherently flawed and will never be able to face fierce competition and make money. But the government has work to do in creating a vibrant aviation sector. It is time the Prime Minister steps in and leads the government to create a long-term strategic vision for aviation for all stakeholders including air cargo, maintenance, repair and overhaul (MRO), manufacturing of components for aircraft, which is a multi-billion-dollar industry, airports (which have become monopolies) and are the biggest impediment to expanding the consumer base and are unwittingly killing the golden goose. The booming economy will collapse if aviation, which is integral to economic growth, collapses.

    The government must build an ecosystem for a sustainable and robust aviation sector rather than make individual policies to suit Air India, or Jet Airways or Kingfisher Airlines, as has been the case all these years.

    Less than 3% of Indians can afford air travel. Last year, only 50 million domestic passengers flew. If the government, for example, asks what policy framework and incentives do we need, take it to 20% in the next five years, how do we make India an international aviation hub for passengers, design, manufacturing, MRO, cargo on the lines of Singapore, by taking advantage of our technical manpower, natural resources and exploding economy, and should aviation be treated as a core infrastructure, we will get the right answers. Time is running out and the Prime Minister, in consultation with the aviation minister and other ministries, must act with speed and decisiveness. Or, as Shakespeare said, "Indecision is in itself grief."
     
  17. amoy

    amoy Senior Member Senior Member

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    So this is not the same Kingfisher I knew of??:shocked:
     
  18. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    The banks refuse to lend to Kingfisher... its over.
     
  19. plugwater

    plugwater Elite Member Elite Member

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    So we left with Indigo and Spice Jet!!

    With KF going down we wont see them getting A380
     
  20. GUNS-N- ROSES

    GUNS-N- ROSES Regular Member

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    dont blame govt for faulty buissness tactics and incompetency of kingfisher airline board. surely, the govt can do much more to help airlines but that doesnt absolve airlines of their share of faulty decisions. low cost air lines with sound buissness strategies are doing pretty well and they r operating in same environment paying same taxes.

    wen u have a CEO much more interested in dress of air Hostess than operating buissness model, the airline is sure to be doomed sooner or later.
     
  21. parijataka

    parijataka Senior Member Senior Member

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    Kingfisher's problem was not only high fuel prices, this is common to all airlines, profligacy by Mallya played its part as others have posted. Indigo is one airline that is still making profits. Kingfisher OTOH made losses even in the period around 2008 I think when other airlines were making profits.

    What you say about leaky system is very true though. Industry in this country grows despite the govt.
     

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