MY SCENARIO
When I got a mail from king club saying that they
are going to reconfigure the kingfisher red aircraft and they are sorry for the
inconvenience caused, I felt so proud of myself for being a king club member
and humbled by their loyalty to travelers !! But when I came to know that there
are thousands of king club members and everyone was addressed in the same manner,
I didn’t feel that good!!
It took another one month for me to realize that
many flights were cancelled and passengers were stranded at the airport. The
best customer support officers at kingfisher desk looked so dumb at that time.
Many travel agents were busy handling the calls and queries, mainly asking them
to cancel the flight ticket and book in other airways.
Media reporters were in an hurry to catch up the
king of good times, but hardly anyone got him. But soon he updated in twitter
that he is enjoying with his F1 team.TV9 was obsessed by the downfall of the
kingfisher. Journalists had sleepless nights thinking about creating
controversial report on it. At last when the media ran out of controversial
topics, they started blaming Deepika Padukone for bringing the much mattered
bad luck for the kings. Only Siddarth would have known how he consoled her.
Vijay Mallya’s twitter account even got hanged
because of the sudden increase in the followers. Even the CEO and CFO could not
satisfy the hungry media. They answered in a very diplomatic manner. Even I was struck in the middle thinking about whom to be blamed.
ENTRY OF THE KING OF GOOD TIMES
The much awaited press conference has been finally
called at Hyatt Regency at Mumbai by Mallya. The lady journalist at the front
row could not resist her anger on Mallya for cancelling one of the flights she
was supposed to travel for attending an important meeting. She started with a
fire ball asking to Mallya that how he feels when he cheated his loyal customers!
Mallya was as ever nice to ladies when he started
answering to her question with an humble apology to all his customers, It was
more than enough for her to feel victorious.
Mallya started explaining the situation to the media
by blaming the inflation rate, taxation policy and increasing jet petrol price.
He also blamed media for cooking up the issue in the wrong perspective. Mallya
said fly kingfisher incurred a loss of $120 million and that paved way for
closing down the routes which were not profitable. Also he asked public whether
is it the duty of kingfisher to fly in the loss route. He promised that he will
bounce back and said that dues to the oil companies have been paid up to 95%
and news relating to the shutting down of kingfisher is false.
It was more than enough for the phantom Bal
Thackeray to blame the flamboyance of Mallya for the downfall of the
kingfisher. Even the automobile tycoon Mr.Rahul Bajaj said that who is going to
die should be allowed to die. He literally copied the quote of Herbert Spencer.
He didn’t even have known how much he would have
spent for the cheerleaders, says one common man on T.V. In an debate on CNN
IBN, Captain Gopinath needlessly proved again that he is a fool as he could not
give a clear answer for the crisis.
THE OUTSIDE STORY
The billionaire, the flamboyant, the king of good
times, the politician, the powerful etc was the tag that Vijay Mallya had so
far and the one more tag will soon will be associated with him, the most
cunning!!!
It was a straight forward decision from Mallya to
cancel the flights to reduce the loss incurred and reconfigure the kingfisher
red with the full service. But he could have done this cancellation in much
more better way.
Aviation sector in India for me is like the
Chaaiwala near to my home who used to complain that the centerfresh chewing gum
used to get over soon from his shop and he will charge more for it so that it
won’t finish. I often used to wonder on the fact that the number of air
passengers is increasing every year but the jet fuel price still loved to climb
up the graphs. Hence I reached up to a funny conclusion that the increase in
passengers is directly proportional to the increase fuel price.
Aviation sector has been infected by the fuel price.
Sales tax often stood at 26%.Price rise often stared at 9%. The class that
kingfisher maintained stood firm irrespective of all these for long time. But
it was just a matter of time when India’s second largest carrier lost its
stand. Even kingfisher called out for the bailout but later withdrawn the
request
Its not about the intervention of Govt. that
kingfisher required, its about proper management of funds, says BJP by opposing
the Govt. support to kingfisher. Marxist party said that they won’t allow the
Govt. to help kingfisher with the money of public.
THE INSIDE STORY
Vijay Mallya owns a luxurious yatch costing $130
million, a huge bungalow at Goa, plenty of vintage cars, 200 horses etc. His
liquor business had a growth of 46% in 2011. IPL team never been a concern of
loss. His real estate business also had a steady growth.
But nothing could stop from incurring loss to fly
kingfisher. The next best thing was to cancel the flights. Now as a part of
recovering from the loss, the fly kingfisher had converted $28 million debt to
equity causing loss for the banks. But Govt. asked the banks to support the
kingfisher. SBI asked to raise funds through fresh issues.
As the central Govt. cannot help a private sector
directly, Aviation Minister asked the finance ministry to sort out the issue.
Mallya welcomed the support of central Govt.
There has been a news that Fly kingfisher got two
deal proposal worth $380 million, one from an Indian investor and another from
a consortium of 14 banks led by SBI. But Mallya said it’s factually wrong.
Mallya lashed at state Govt. for its heavy sales tax
and even called for direct import of fuels so that he don’t pay sales tax.
Once the market price of Kingfisher was 40 rupees
per share, but they kept as 65 rupees. Now it has come down to 17 rupees
triggering another share market collapse.
MY VIEWS
According to me it was a bad ploy to purchase plenty
of aircraft during 2008 by taking huge loans from banks. The competition with Jet airways to acquire
Air Sahara and Air Deccan was needless that time. The ambitious vision had
triggered the downfall of kingfisher.
Kingfisher could not handle the competitive pricing from other airways.
It was foreseen by many financial analysts that recession going to strike the Indian
economy. But during the recession time, kingfisher borrowed a lot of loan from
banks for meeting the working capital requirements.
Now all the past borrowing formed a mountain. They
went for a financial restructuring last time by reducing the debt. But now they
have to restructure it again.
WHAT IS NEXT?
It’s time for Govt. to say yes for the Foreign
Direct Investment. They have to review the taxation policy. Otherwise airlines
have to import fuels.
FDI is the long term solution for this crisis.
Decrease in fuel price and reducing the tax may give a sigh of relief but it’s
not going to last long. It’s good for the development of the aviation industry.
It’s very much clear that standard of living will be increased with the steady
growth in the economy and also in the long run, inflation rate will come down.
The current booing not going to demolish the
goodwill of the kingfisher as the rest cannot compete with the flamboyance of
the most cunning person in India. Kingfisher will be back with fully
reconfigured aircrafts to give sleepless nights for the research and
development department of other carriers.
