India carrier that said it would fly to Australia faces ruin
It’s been seven years since Indian tycoon Vijay Mallya signed up for A380s to fly here, there or anywhere, and he now owes $1 billion, has just bounced a $2 million cheque, and faces jail
In June 2005 at the Paris Air Show the media was given a few minutes notice of a razzle dazzle press conference in the Airbus chalet with one of India’s richest entrepreneurs, Vijay Mallya, at which he signed under a blaze of arc lights contracts for five A380s and five A330s.
When I asked him if he looked forward to flying them to Australia, he said ‘Yes’. Then a Canadian reporter asked from the back of the scrum if he looked forward to flying them to Canada, and he also said ‘Yes.’
It soon became obvious Mallya was happy to say he would fly the giant Airbuses he had signed up his Kingfisher Airlines to take delivery of sometime in 2010 or 2011 to any country any reporter cared to nominate.
In a more detailed interview with this reporter he said, inter alia, ‘I have 100 million young professional Indians who drink my beer and who will fly my aircraft.’ As the head of India’s, and according to some rankings, the world’s largest liquor and beer brewing enterprise, which was a part of the UB Group, and which had made Kingfisher beer a household name, it seemed a reasonable claim, at least as far as the drinks were concerned.
Since then, it has been one calamity after another for Kingfisher, and to be fair, for the entire airline sector in the sub-continent, as rash hopes and absurdly optimistic forecasts of demand, saw amazing numbers of airliners of many types ‘ordered’ against all probabilities that they would have the infrastructure, never mind the passengers, to fill them.
Seven years and four months later, it is nearly all over for Kingfisher, the airline, not the beer. And quite possibly, for Vijay Mallya. The Kingfisher brews claims 36% of all beer consumed in a country with a population of one billion, which includes several hundred million who have through economic growth become by various measures, wealthy, reasonably wealthy, or close to becoming significant consumers, of everything, except air travel.
But court orders against the airline and its management over the bouncing of a $1.9 million cheque for monies owed to Hyderabad Airport, seem to underline the earlier signs of impending collapse, which have included grounding its operations to save money and failing to pay employees for months on end.
Financial statements claim the airline has debts of $1 billion.
Mallya’s pronouncements on aviation have become increasingly rare but bizarre, including a statement a year ago that low cost air travel had no future and that Kingfisher would go up market as the way of the future, when in fact, it has always presented a very upmarket product to consumers, and charges up to twice the fare of any of its also struggling competitors.
Kingfisher’s anticipated demise will not contrary to some reports, make any difference to the rest of the sector in India, since it has hardly flown for a long time, and when it has been flying, has flown almost empty, no doubt because of the risk that consumers would detect in a carrier that is continually in the news for the wrong reasons.
The Australia-India market has enormous potential, most of which has so far been captured by Singapore Airlines, which offers a wide range of direct connections over Singapore. Air-India has repeatedly leaned on the media to run stories about how it is going to start a complex circular rotation of Boeing 787-8s between the sub-continent and Sydney and Melbourne, or Melbourne and Sydney, via various India cities to or from Mumbai or Delhi or whatever it has most recently thought of, driving some retail travel agents to distraction amid all the indecision as their would-be India customers hang up on them and go elsewhere.
At the moment Air-India has two 787-8s but it is reported that a cargo door on one of them fragmented while stationary. Whether this is completely true is unknown, but up until recently it was true that the Dreamliner concerned had been grounded.
Whatever the answer is to the need for non-stop flights between Melbourne or Sydney or both to India, it won’t be Kingfisher.