Thursday , 11 August 2022

Your views: Topic of the week: The future of Kingfisher Airlines? Tatas should acquire?

Continuing our weekly interactive post where we seek your views, this week we discuss Kingfisher Airlines.

Whether due to his own poor planning and execution, or as some conspiracy theorists will have you believe, there is no doubt, in the case of Kingfisher Airlines, Dr. Vijay Mallya has been systematically pushed against the wall. Kingfisher Airlines is now a weight around the neck, draining money from his cash cow businesses of liquor and beer.

Many brand gurus feel that Kingfisher Airlines will thrive 5~10 years from now, once India’s per capita income rises, which will provide the passenger base willing to pay the higher fares a premium brand like Kingfisher can command.

But, in a guest column in the Business Standard, Kishor Ostwal claims

In a systematic effort, he was pushed to the wall and compelled to cut his size, liquidate assets, and now promoted to sell stakes in some of his companies and ventures. F1 and IPL could be clearly hit and the only choice with him now is that of liquor or airlines. In fact in November 2011 Mr Mallya made out a detailed plan of restructuring and fund raising by asset stripping. But before he could implement his plans there were attacks from the all corners like Banks, Government departments, Income Tax departments and even ministry going on record against his industry.

and one can expect Dr. Mallya to sell Kingfisher Airlines very soon.

Mr. Ostwal goes on to claim that potential buyers include the Ambani led Reliance group, or the Tatas. Brushing away the pessimists he says

The big question in the market that remains is, why would one buy the ailing KFA? At Rs 6 nobody thought Mahindra would buy out Satyam and stock went on to cross Rs 100. Companies like Ispat found takers from groups like JSW. This clearly indicates that one has to take risk on sell.

What are your thoughts on the future of Kingfisher Airlines?

  • Do you feel Dr. Mallya will keep the airline in small size and continue? Will the size of his debts allow this option?
  • Do you feel Dr. Mallya will sell Kingfisher? If so, to whom? An airline? Reliance? Tatas?
  • The Tatas are a favourite contender. They have good relations with Singapore Airlines, are one of the most respected brands not just in India but the world, but they also have a reputation of “clean” business. Will this work?
  • Let us not forget the recent injection of funds in to the Force India F1 team by Sahara. With much bitterness between Jet Airways and Sahara over the former’s forced acquisition of Air Sahara, are the folks at Sahara itching for another crack at Jet?
Share your thoughts via a comment.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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