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lightsaber
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Kingfisher To Exit Budget Airline Business

Thu Sep 29, 2011 11:53 pm

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
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seabosdca
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RE: Kingfisher To Exit Budget Airline Business

Thu Sep 29, 2011 11:57 pm

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...   
 
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PanAm_DC10
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 12:14 am

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?
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lightsaber
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 2:28 am

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.

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Asiaflyer
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 8:37 am

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?
SQ,MI,MH,CX,KA,CA,CZ,MU,KE,OZ,QF,NZ,FD,JQ,3K,5J,IT,AI,IC,QR,SK,LF,KL,AF,LH,LX,OS,SR,BA,SN,FR,WF,1I,5T,VZ,VX,AC,NW,UA,US,
 
scouseflyer
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 9:18 am

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.
 
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HAWK21M
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 11:35 am

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.....
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dfwking
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 4:50 pm

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.
 
LJ
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RE: Kingfisher To Exit Budget Airline Business

Fri Sep 30, 2011 5:51 pm

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?
 
aa757first
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RE: Kingfisher To Exit Budget Airline Business

Sat Oct 01, 2011 12:30 am

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.
 
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RE: Kingfisher To Exit Budget Airline Business

Sat Oct 01, 2011 1:34 am

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.
 
DTWLAX
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RE: Kingfisher To Exit Budget Airline Business

Sat Oct 01, 2011 1:53 am

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.
 
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HAWK21M
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RE: Kingfisher To Exit Budget Airline Business

Sat Oct 08, 2011 9:45 pm

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.
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MaverickM11
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RE: Kingfisher To Exit Budget Airline Business

Sat Oct 08, 2011 9:54 pm

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.
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scouseflyer
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RE: Kingfisher To Exit Budget Airline Business

Thu Oct 13, 2011 7:57 am

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!
 
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HAWK21M
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RE: Kingfisher To Exit Budget Airline Business

Thu Oct 13, 2011 9:19 am

I never thought sahara had $$$ left,as their sahara star hotel in Mumbai is still Incomplete from the outside. 
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Byrdluvs747
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RE: Kingfisher To Exit Budget Airline Business

Thu Oct 13, 2011 11:19 am

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