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Kingfisher To Exit Budget Airline Business  
User currently offlinelightsaber From United States of America, joined Jan 2005, 13138 posts, RR: 100
Posted (2 years 11 months 4 weeks 1 day 10 hours ago) and read 8736 times:
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http://www.bbc.co.uk/news/business-15097537

""We are doing away with Kingfisher Red because we do not intend to compete in the low-cost segment," Mr Mallya said."

Later in the article:
"The margins of Kingfisher class are higher than Kingfisher Red. That's because the yields are better," Mr Mallya, who is chairman and chief executive of Kingfisher, added.


I find this very interesting...

Lightsaber


Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
16 replies: All unread, jump to last
 
User currently offlineseabosdca From United States of America, joined Sep 2007, 5474 posts, RR: 6
Reply 1, posted (2 years 11 months 4 weeks 1 day 10 hours ago) and read 8717 times:

Great stuff as ever from Mr. Maliya! I'm sure if he just brightens the shade of red in the Kingfisher livery it will magically turn his budget markets into premium-heavy ones by blinding people into paying more.

I'm surprised the headline isn't already "Kingfisher To Exit Airline Business." I guess he hasn't run out of billions yet...   


User currently offlinePanAm_DC10 From Australia, joined Aug 2000, 4162 posts, RR: 89
Reply 2, posted (2 years 11 months 4 weeks 1 day 10 hours ago) and read 8612 times:
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Quoting lightsaber (Thread starter):
We are doing away with Kingfisher Red because we do not intend to compete in the low-cost segment,"

Does this mean the 55 A320s on order for Kingfisher Red, 12 delivered, will be transferred to Kingfisher?



Ask the impossible to achieve the best possible
User currently offlinelightsaber From United States of America, joined Jan 2005, 13138 posts, RR: 100
Reply 3, posted (2 years 11 months 4 weeks 1 day 7 hours ago) and read 8252 times:
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Quoting PanAm_DC10 (Reply 2):
Does this mean the 55 A320s on order for Kingfisher Red, 12 delivered, will be transferred to Kingfisher?

I posted this link as I'm trying to figure out what it means for IT.

Quoting seabosdca (Reply 1):
I'm sure if he just brightens the shade of red in the Kingfisher livery it will magically turn his budget markets into premium-heavy ones by blinding people into paying more.

  

Ok, being serious, I would think IT would have to duke it out with 9W for premium passengers. If it was as simple as IT ditching low cost passengers and gaining higher fare passengers... IT would never have launched Kingfisher red.

So I wonder, is this a temporary setback or a more... indicative indication of Kingfisher's cash flow.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineAsiaflyer From Singapore, joined May 2007, 1136 posts, RR: 0
Reply 4, posted (2 years 11 months 4 weeks 1 day 1 hour ago) and read 7821 times:

Quoting lightsaber (Reply 3):
So I wonder, is this a temporary setback or a more... indicative indication of Kingfisher's cash flow.


More than temporary I would say. Kingfisher is exiting the business segment where they aren't able to make money.
Hopefully it results in a healthier IT.
How much of IT's total revenues will be left after this?

Quoting PanAm_DC10 (Reply 2):
Does this mean the 55 A320s on order for Kingfisher Red, 12 delivered, will be transferred to Kingfisher?


I doubt Kingfisher will be able to absorb ordered planes in the rate scheduled for Kingfisher Red in addition to own orders.
Should mean either cancellations or deferrals, or both.
IIRC TK has already taken some A321s intended for IT, right?



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User currently offlinescouseflyer From United Kingdom, joined Apr 2006, 3390 posts, RR: 9
Reply 5, posted (2 years 11 months 4 weeks 1 day 1 hour ago) and read 7677 times:

It's not erally clear if "doing away with" means closing down or selling off - I suspect closing down which would suggest cancellations. However given IT's track record with planes that they no longer need (A345s especially) they seem unwilling / unable to cancel so we may see a huge deferral of these planes.

User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 6, posted (2 years 11 months 4 weeks 22 hours ago) and read 7413 times:

Finally an attempt is being made to curtail the losses.....The sale of the corporate office is another step.
Heard the ATR fleet will be shutdown too.....



Think of the brighter side!
User currently offlineDFWKING From United States of America, joined Apr 2005, 13 posts, RR: 0
Reply 7, posted (2 years 11 months 4 weeks 17 hours ago) and read 6461 times:

Why not just sell off Kingfisher Red and allow it to function at a separate airline? This airline could focus on lowering costs and competing with SpiceJet and IndiGo. Maybe the likes of Tatas or Ambanis might be interested?

Kingfisher premium can get additional capital that they desperately need to reduce their debt burden.



so fly...like a triple seven...
User currently offlineLJ From Netherlands, joined Nov 1999, 4430 posts, RR: 0
Reply 8, posted (2 years 11 months 4 weeks 16 hours ago) and read 5922 times:

Thus, in 2005 you started as an airline, in 2008 you buy a budget carrier and in 2011 you dismantle the budget carrier. What will they do in 2014? Dismantle the entire airline?

User currently offlineaa757first From United States of America, joined Aug 2003, 3350 posts, RR: 7
Reply 9, posted (2 years 11 months 4 weeks 9 hours ago) and read 3985 times:

Quoting lightsaber (Reply 3):
Ok, being serious, I would think IT would have to duke it out with 9W for premium passengers. If it was as simple as IT ditching low cost passengers and gaining higher fare passengers... IT would never have launched Kingfisher red.
Quoting LJ (Reply 8):
Thus, in 2005 you started as an airline, in 2008 you buy a budget carrier and in 2011 you dismantle the budget carrier. What will they do in 2014? Dismantle the entire airline?

The DGCA (India's aviation regulator) has a rule that restricts new airlines to domestic flying for their first five years. Kingfisher was able to enter the international markets two years earlier due to the merger. I'm not sure if that was the motivation or not, but that's one guess. The other certainty is that IT doesn't seem to be particularly concerned with business sense.

Quoting DFWKING (Reply 7):
Why not just sell off Kingfisher Red and allow it to function at a separate airline? This airline could focus on lowering costs and competing with SpiceJet and IndiGo. Maybe the likes of Tatas or Ambanis might be interested?

The airline market in India is quite competitive as it is now, mainly because of low cost competitors. I don't think it'd be wise to create yet another competitor. In the long term, it would probably be better to make sure any retired planes get out of India with the hopes of commanding fare premiums.

I really think India is a good market for high fare travel. This is surprising, though, since 9W is moving in the opposite direction right now.


User currently offlineVIDP From India, joined Feb 2010, 161 posts, RR: 0
Reply 10, posted (2 years 11 months 4 weeks 8 hours ago) and read 3888 times:

Quoting aa757first (Reply 9):
I really think India is a good market for high fare travel. This is surprising, though, since 9W is moving in the opposite direction right now.

Kingfisher has a better premium product than Jet Airways. Their Kingfisher Class fares had always been on the higher side when compared with other full service carriers. By converting the Kingfisher Red flight to Kingfisher flight they just got another reason to charge more on their flights.

For example DEL-PNQ sector the evening flight used to be a Kingfisher Red flight and an ex DN A320 was deployed on the same sector. Today the flight has been converted to Kingfisher class flight although the equipment remains the same which means no PTV,s.

As far as the meals are concerned servings and meal sizes have been reduced. I guess variety has been cut down as well. Now everytime i fly KF i have always get choclate mud cake as a dessert.


User currently offlineDTWLAX From United States of America, joined Aug 2009, 795 posts, RR: 0
Reply 11, posted (2 years 11 months 4 weeks 8 hours ago) and read 3852 times:

Quoting VIDP (Reply 10):
For example DEL-PNQ

Decisions to operate the Red flights on routes like the above did not make sense at all.
PNQ-DEL, PNQ-BOM, PNQ-BLR has premium traffic. One would have assumed Kingfisher would operate planes with a front cabin on such routes. But most of the flights were Kingfisher Red. This is where I do not understand the business sense of IT.

PNQ is a major industrial metro. Hell, if LH can operate FRA-PNQ there has to be sufficient domestic traffic demanding a premium cabin. And mind you, LH wants to operate a bigger plane to PNQ but cannot due to runway restrictions.


User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 12, posted (2 years 11 months 2 weeks 6 days 12 hours ago) and read 3157 times:

Quoting LJ (Reply 8):
Thus, in 2005 you started as an airline, in 2008 you buy a budget carrier and in 2011 you dismantle the budget carrier. What will they do in 2014? Dismantle the entire airline?

Exactly the problem...Mgmt is NOT functioning as supposed to....Looks like no plan in place.



Think of the brighter side!
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17511 posts, RR: 45
Reply 13, posted (2 years 11 months 2 weeks 6 days 12 hours ago) and read 3123 times:

Quoting aa757first (Reply 9):

The airline market in India is quite competitive as it is now, mainly because of low cost competitors.

I think the bigger problem is the government's support of the walking dead at AI/IC.



E pur si muove -Galileo
User currently offlinescouseflyer From United Kingdom, joined Apr 2006, 3390 posts, RR: 9
Reply 14, posted (2 years 11 months 2 weeks 2 days 2 hours ago) and read 2432 times:

I know that VJM doesn't own that much of IT anymore but this could be a further example of him "tightening his belt" financially:

http://www.autosport.com/news/report.php/id/95295

It's being portrayed as 2 great Indian businesses getting together but it will also raise some cash for VJm to support his other enterprises - $100 million doesn't go very far in the airline business though!


User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 15, posted (2 years 11 months 2 weeks 2 days 1 hour ago) and read 2321 times:

I never thought sahara had $$$ left,as their sahara star hotel in Mumbai is still Incomplete from the outside. 


Think of the brighter side!
User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2361 posts, RR: 1
Reply 16, posted (2 years 11 months 2 weeks 1 day 23 hours ago) and read 2176 times:

Maybe they can sublease any unneeded A320's to other carriers. Africa?


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