Gonzalo
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Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 12:31 pm

I know there are one hundred threads about "the end of Kingfisher", but now the situation looks somber like never before IMHO. Not only the airline is under pressure from the civil aviation authorities ( with many employees waiting 7 months for his payments ), but is making un-forced mistakes like selling tickets in dates when there are not certainty about the operations continues or not. That is just giving another excuse to the authorities against the airline.

http://economictimes.indiatimes.com/...-bookings/articleshow/16723883.cms

Rgds.
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TC957
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 12:41 pm

To quote from the Corinthians - " Oh death, where is thy sting "
The Kingfisher saga is surely the most painful airline failure in recent times. One wonders what effect this has on the rest of VJM's business empire.
 
Gonzalo
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 1:27 pm

Quoting TC957 (Reply 1):
The Kingfisher saga is surely the most painful airline failure in recent times.

I agree, although the Indian government and its effort to favor AI is not irrelevant in this failure IMO.

Rgds.
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comorin
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 1:44 pm

I feel sorry for Vijay Mallya; he aimed high and failed. Like many an entrepreneur, he started believing in his own BS, and the harsh reckoning is now at hand.

Sadly, this will pretty much wipe him out and dismantle his empire. Nothing worse than becoming poor after being rich. I wish him strength to put up with the schadenfreude and and other indignities to follow..

Too bad he didn't have the Government covering his back like AI. I'm still hoping that IT will find a white knight at the last minute.
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 1:59 pm

Kingfisher has stopped flying with effect of last Tuesday....

Quoting gonzalo (Reply 2):
I agree, although the Indian government and its effort to favor AI is not irrelevant in this failure IMO.

Well, please learn the facts before you go running with your opinion. The Indian government hasn't favored AI - have you seen the 787 delay fiasco? Have you seen how GoI wouldn't let AI management resolve labor issues during a strike? Have you seen how corrupt officials in GoI will force Air India to drop profitable routes just so that influential competitors can have a monopoly? Sure, AI can rely on the government to bail them out if things get too bad, but this "favoritism" is something AI would do far better without.

That's not to say that AI or GoI played no part in IT's bankruptcy - AI was just another competitor... And for a rich and influential person like Vijay Mallya (Chairman of Kingfisher), GoI roadblocks don't mean anything.

Kingfisher, incidentally, was favored quite a bit by GoI as well. IT was permitted to use Terminal 1A at BOM, take over prime slots at BOM and DEL without due process, and a whole bunch of other shenanigans. Any sane regulator would have shut IT down months ago, but our regulators are in the pocket of Vijay Mallya, so it's taken 10 months...

As JoeCanuck said on a thread a while back, " For many of us, India is such a complex and bewildering universe, it seems to defy every effort to logically analyse. The machinations involving AI give us a window into that world. " Things which would seem to make sense (AI is favored since it is state-owned) aren't necessarily true on the ground...
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Gonzalo
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 2:12 pm

Quoting aeroblogger (Reply 4):
Well, please learn the facts before you go running with your opinion.
Quoting aeroblogger (Reply 4):
As JoeCanuck said on a thread a while back, " For many of us, India is such a complex and bewildering universe, it seems to defy every effort to logically analyse. The machinations involving AI give us a window into that world. " Things which would seem to make sense (AI is favored since it is state-owned) aren't necessarily true on the ground...

I apologize if my comment wasn't informed enough, like you said, the GoI involvement and its actions are not easy to understand or read from the other side of the world, and I probably have only a fraction of the information regarding how the things work in India .
Thank you for your additional info and comments, it is certainly a good help to understand a little better what is happening...

Rgds.

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aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 3:13 pm

Quoting comorin (Reply 3):
I feel sorry for Vijay Mallya; he aimed high and failed. Like many an entrepreneur, he started believing in his own BS, and the harsh reckoning is now at hand.

Vijay Mallya is a pompous ass, and deserves everything coming to him. I can't stand him - between his annoying voice, his alcohol-infused party life and the mindless consumerism it stands for, and his total lack of understanding of the industry, any possible sympathy I might have felt is gone. The letters he wrote (or perhaps his 8-year old secretary wrote) to employees, full of empty lies about when paychecks might come are some of the most disgusting documents I've ever seen...

Devesh nailed it in his recent post which underscored the difference between what VJM (and his family) are doing/feeling and what IT employees are going through...

While Sid Mallya is tweeting "Just spent the morning playing volleyball with 12 bikini clad models on the beach...now I understand why people hate me. HA!," a Kingfisher employee's wife is committing suicide due to non-payment of salaries.

Quoting comorin (Reply 3):
Too bad he didn't have the Government covering his back like AI. I'm still hoping that IT will find a white knight at the last minute.

He's had the government covering his back for a long time - GoI owns quite a bit of IT, and IT owes tons of back-dues to the state (fuel, airport fees, taxes, etc.)

And with briefcases to send to whichever Mantri is in charge of MoCA, he's basically had the government covering his back ever since the airline started...

Quoting gonzalo (Reply 5):

I apologize if my comment wasn't informed enough

No need to apologize, and I hope my original statement didn't come across rude...
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comorin
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 3:43 pm

Quoting aeroblogger (Reply 6):
He's had the government covering his back for a long time - GoI owns quite a bit of IT,

Really? I wasn't aware of that.
 
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legacyins
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 4:01 pm

Really is a shame. I remember he had plans to serve SFO with their A345. They were even going to build a lounge where the current EK lounge is at SFO.
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 4:03 pm

Quoting comorin (Reply 7):
Really? I wasn't aware of that.

SBI and other state owned banks own a significant share of KFA.
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lightsaber
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 5:16 pm

Has there been any real impact from the IT shutdown? Seriously, they are so small and their yield so low, did any of their markets really notice?

Quoting aeroblogger (Reply 6):

Vijay Mallya is a pompous ass

I don't care how he acts at social events, what I care is he let employees go so long without being paid. For that, a long jail term. I have no idea how well he is financially protected from IT, but I wouldn't shed even a concern if he was bankrupted.

But that won't happen.


As to IT flying again or not, I see ZERO business case in investing in them. Better to start from fresh or invest in another Indian airline.



Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 5:22 pm

Quoting legacyins (Reply 8):
Really is a shame. I remember he had plans to serve SFO with their A345. They were even going to build a lounge where the current EK lounge is at SFO.

Those pipe dreams were exactly that - pipe dreams. The fact that IT wasted time and money even thinking about such a possibility speaks volumes about the quality of management...

If they had actually started the route, they would have been bankrupt long ago..

Quoting lightsaber (Reply 10):
Has there been any real impact from the IT shutdown? Seriously, they are so small and their yield so low, did any of their markets really notice?

The impact was felt early this year... By now, the impact isn't being felt much any more.

Quoting lightsaber (Reply 10):
what I care is he let employees go so long without being paid. For that, a long jail term.

I agree completely!
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Vimanav
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 6:50 pm

We have a Malayalam saying about a squirrel attempting to shit like an elephant, with an unstated reference to the condition of its butt after the effort. VJM tried to expand IT in Emiratesque fashion forgetting that he did not own the country unlike EK's owners. So lo and behold you have him, Ozymandias like, reigning over ruins.

The bigger problem with the man and his progeny is their total inability to read the writing on the wall and still continue with their shenanigans which is making them increasingly, objects of public hatred and ridicule.

Alcohol is a perfect solvent. It dissolves careers, relationships, marriages and families... And now also Airlines !!!

Vimanav

P.S. the last line is not my original, but lifted straight from an SMS I got.
Sarfaroshi kii tamannaa ab hamaare dil mein hai, Dekhnaa hai zor kitnaa baazu-e-qaatil mein hai
 
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lightsaber
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 7:06 pm

Quoting aeroblogger (Reply 11):
The impact was felt early this year... By now, the impact isn't being felt much any more.

That was my impression. The first downsizing created news about a spike in Indian domestic fares. Now, according to the news I have been reading on Kingfisher, this is the 'slow season' for Indian air travel. So winding down what little remains of IT should be painless.

Quoting Vimanav (Reply 12):
Alcohol is a perfect solvent. It dissolves careers, relationships, marriages and families... And now also Airlines !!!

  

At colleges, it also dissolves clothing too.  

Lightsaber
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bizmark03
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 7:32 pm

So now that the writing is on the wall, once KFA goes into administration, who will be interested in picking up what bits and pieces of KFA?
Probably some investors are waiting for it to buy out KFA through that route.
 
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lightsaber
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 7:58 pm

Quoting bizmark03 (Reply 14):
Probably some investors are waiting for it to buy out KFA through that route.

I still don't see the ROI.

Does Kingfisher Airlines own their name, or is Kingfisher a trademark leased from United Breweries?


Lightsaber
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aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 8:15 pm

Quoting lightsaber (Reply 15):
Does Kingfisher Airlines own their name, or is Kingfisher a trademark leased from United Breweries?

It's pretty irrelevant - the Kingfisher Airlines brand is worthless.
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blrsea
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 8:26 pm

In India, nothing is certain till it actually occurs on the ground. I wouldn't write off Kingfisher yet. As aeroblogger said, he has "friends" in high places, who can pull this out for a long time! In fact, I read somewhere that they are making more losses if they fly, so this shutdown may not be entirely due to the strike as KFA management wants everyone to believe.
 
Gr8Circle
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 8:42 pm

Quoting gonzalo (Reply 2):
I agree, although the Indian government and its effort to favor AI is not irrelevant in this failure IMO.

I think a lot of a.netters (especially those with no understanding of India) just have a blind hatred for AI and the GOI....please understand that the condition of IT today is predominantly because of it's owner and the mangement.....don't blame AI and the GOI for everything that happens in India......
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 8:57 pm

Quoting blrsea (Reply 17):
In India, nothing is certain till it actually occurs on the ground. I wouldn't write off Kingfisher yet. As aeroblogger said, he has "friends" in high places, who can pull this out for a long time! In fact, I read somewhere that they are making more losses if they fly, so this shutdown may not be entirely due to the strike as KFA management wants everyone to believe.

IT has not made a single rupee on any route they've flown in months. The only reason they even bothered to operate a schedule is because it allowed them to run the Ponzi of collecting payments for future (unusable) tickets.

With cash running out (or maybe it already ran out), I can definitely see why IT management would want to ground the airline.

What I don't understand is how they plan to get the carrier moving again.. Indian media has been saying the same crap about a middle eastern carrier buying a stake, but it seems incredibly unlikely to me. There is no money to be made...

Of course, there is always the chance that Mallya found a bakra with money. But it's a very, very, very small chance.

In other news, MoCA has decided that Kingfisher's AOC won't be cancelled, but Kingfisher will need permission when/if they restart operations. Clearly Mallya still has some money left...
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Gonzalo
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 9:21 pm

Quoting Gr8Circle (Reply 18):
Quoting gonzalo (Reply 2):I agree, although the Indian government and its effort to favor AI is not irrelevant in this failure IMO.
I think a lot of a.netters (especially those with no understanding of India) just have a blind hatred for AI and the GOI....please understand that the condition of IT today is predominantly because of it's owner and the mangement.....don't blame AI and the GOI for everything that happens in India......

  

Quoting gonzalo (Reply 5):
I apologize if my comment wasn't informed enough, like you said, the GoI involvement and its actions are not easy to understand or read from the other side of the world, and I probably have only a fraction of the information regarding how the things work in India .


Sometimes the information can be a little confusing, specially when there are few independent sources...

Rgds.

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JOYA380B747
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 9:35 pm

In case KFA fails completely, as an airline traveller, I will remember the airline by its amazing on-board service, the best for any domestic airline I have personally seen around the world.

Thank God I never had to fly them in recent months with all their fiascos, but yes those KFA birds will be sorely missed by me, as an aviation enthusiast because FDI or not, I don't see a fresh new full-service-pan-indian-airline happening in many years to come.

and the tale of failed Indian airlines continues.....
If it wasn't for AI and those money mongers sitting in the parliament, 9W would have been as big as SQ...:(
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 9:39 pm

Quoting gonzalo (Reply 20):
Sometimes the information can be a little confusing, specially when there are few independent sources...

Rgds.

G.

Don't take it personally sir - it's a mistake which many people make, and you just happened to time your statement badly...

On your side of the world, the most notable state-owned carrier is AR, and the Government of Argentina makes all kinds of ridiculous policies to favor AR over its private competitors... I can definitely see where a bias against state-owned carriers would come from.

However, in India, the private carriers are favored over the national carrier. It's because corruption is so ingrained in our system - who will pay a bribe to the government on behalf of the government Who will pay off the media? And worst of all, who cares? There is a lot of apathy in India about all these issues, because people have just given up. Nowadays, I look at the paper, see the latest billion dollar scam, and turn the page. It's not news any more.

It's an incredibly strange system which is counter-counterintuitive. But such is life.
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HAWK21M
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:07 pm

Quoting comorin (Reply 3):
this will pretty much wipe him out and dismantle his empire.

will it really.....or would only his committed assets go........

Feel sad for the employees.....
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manny
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:07 pm

Kingfisher is the cat that has had 9 lives. Not sure how many more lives are still left. But i will believe it when it actually happens.

If pure economics dictated when it folds then it should have done 2 years ago.
 
tonystan
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:14 pm

Quoting HAWK21M (Reply 23):
Feel sad for the employees.....

I felt sad for the employees back in March...now I just think they are stupid to still be there working for nothing for so long!
I know economic times are difficult but if you are not receiving payment for services rendered you walk. Its disgusting to think that he still expects his employees to come to work for nothing just so he can boost his pride, what planet is he on? And the staff continueing to come to work are just as crazy.
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aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:20 pm

Quoting tonystan (Reply 25):
I know economic times are difficult but if you are not receiving payment for services rendered you walk. Its disgusting to think that he still expects his employees to come to work for nothing just so he can boost his pride, what planet is he on? And the staff continueing to come to work are just as crazy.

It's not quite that simple.

In India, you need a No Objection Certificate from your former employer to change jobs. So, in order for current IT employees to find a new job, they need to get an NOC from Kingfisher.

Kingfisher announced a while ago that they were no longer processing requests for NOCs.

If an employee doesn't turn up, they would be fired (and forfeit delayed salaries if they ever came), and they would be unemployable because of the lack of an NOC.

In essence, professional suicide.
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lightsaber
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:24 pm

I'm having trouble with the thread title. It assume IT will fly again!   

 
Quoting aeroblogger (Reply 19):
What I don't understand is how they plan to get the carrier moving again.. Indian media has been saying the same crap about a middle eastern carrier buying a stake, but it seems incredibly unlikely to me. There is no money to be made...

As I phrase it, where is the return on investment (ROI). With their recent poor load factors (53%) and what has to be incredibly low RASM, who would invest. I think we can agree, we could find a hundred ways of saying 'put a fork in them, they're done.'

Quoting tonystan (Reply 25):
And the staff continueing to come to work are just as crazy.

Sometimes the only way to get a job is to have a job. It isn't right what is being done to the workers.

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
tonystan
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:25 pm

Quoting aeroblogger (Reply 26):
If an employee doesn't turn up, they would be fired (and forfeit delayed salaries if they ever came), and they would be unemployable because of the lack of an NOC.

Thanks for clarifying that. What an absolutely INSANE requirement. So in effect if you are employed in India you are a hostage to the company until they agree to release you?

And even worse, those poor Kingfisher staff having not been paid for months and months cant even go elsewhere to earn income while they airline figures out what to do?

On learning this my opinion of VJ has changed, I now think hes a cruel evil and selfish individual. If he just shut the airline down back at the start of the year and put all its staff out of their misery at least they may be able to have a life!
My views are my own and do not reflect any other person or organisation.
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Mon Oct 08, 2012 10:44 pm

Quoting tonystan (Reply 28):
So in effect if you are employed in India you are a hostage to the company until they agree to release you?

Pretty much.

Quoting tonystan (Reply 28):
And even worse, those poor Kingfisher staff having not been paid for months and months cant even go elsewhere to earn income while they airline figures out what to do?

In aviation, yes.. There's nothing stopping them from joining a completely new industry though, as long as it doesn't require a security permit. All aviation employees require an airside security permit, and you cannot have multiple security permits at one time.

And it's not just the NOC issue. As Lightsaber correctly said,

Quoting lightsaber (Reply 27):

Sometimes the only way to get a job is to have a job.

And the other problem is that there are no job openings for IT employees to be going after.. I mean, there is (arguably mythical) startup carrier Volk Airlines, and Air Costa is gearing up for a Q1 2013 launch, but there just aren't enough jobs to go around.

Quoting tonystan (Reply 28):
On learning this my opinion of VJ has changed, I now think hes a cruel evil and selfish individual. If he just shut the airline down back at the start of the year and put all its staff out of their misery at least they may be able to have a life!

Absolutely.
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AA94
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 12:01 am

Quoting manny (Reply 24):
Kingfisher is the cat that has had 9 lives. Not sure how many more lives are still left. But i will believe it when it actually happens.

  

Quoting aeroblogger (Reply 26):
In India, you need a No Objection Certificate from your former employer to change jobs. So, in order for current IT employees to find a new job, they need to get an NOC from Kingfisher.

This is a rather stupid regulation. In effect, it places people out of work in situations like this ...
If you can't take the heat, you best get out of the kitchen
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 12:07 am

Quoting AA94 (Reply 30):
This is a rather stupid regulation. In effect, it places people out of work in situations like this ...

Our regulator (DGCA) was considering overhauling the regulation earlier this year so that it can accomplish its goals, whatever they are, without these side effects. However, the idea was thrown out at some point and never heard about again...

I'd be willing to bet that Mallya was responsible.
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cricket
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 8:14 am

Quoting Vimanav (Reply 12):
The bigger problem with the man and his progeny is their total inability to read the writing on the wall and still continue with their shenanigans which is making them increasingly, objects of public hatred and ridicule.

Alcohol is a perfect solvent. It dissolves careers, relationships, marriages and families... And now also Airlines !!!

Well, Mallya is having to dispose of his stake in United Spirits to pay off people. His son is desperate to break into Bollywood, although every passing day the 'Mallya' brand gets so toxic, it will haunt him and his progeny for a long time. With his stake in United Breweries pledged, Heineken must be licking their lips at the chance to enter the Indian market.

Kingfisher employees are holding a candlelight march between India Gate and Jantar Mantar in New Delhi today. Mallya is too scared to return to India to face the music even at the F1 race. This talk of 'investors' is bunkum, all Mallya has is the slots that the AAI have allotted to him and he is using that as a fungible commodity.
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art
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 8:40 am

Anyone know who gets paid in what order when a business goes bust in India? In the UK I think it is:

(a) the accountants appointed by the Official Receiver (appointed when a company goes into "administration")
(b) anything due to the government (taxes owing etc)
(c) employee salaries
.. then the list goes on.

Do the unfortunate employees come further down the list in Indian law? eg after trade creditors, banks etc

Another thing:

Quoting aeroblogger (Reply 26):
Kingfisher announced a while ago that they were no longer processing requests for NOCs.

Does the company have a legal duty to process NOC requests? Are they flouting the law to get continuing staffing with no pay ie free labour?
 
speedbird118
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 9:47 am

Please pardon my ignorance on this issue, but can an airline attempt to generate revenue without actually having to have its own equipment or manpower? I am thinking like if IT had a code share with another airline and it was still able to sell tickets on that particular route operated by the code share airline, would it be possible for IT to stay alive like that?
 
jfk777
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 4:12 pm

A sad ending to what was India's brightest star in teh airline industry, an Indian Richard Branson. Mr. Mallya's ideas will live on in some planes he never took delivery of helping Arik Air of Nigeria. Arik Air has two A340-500 and just leased a former Kingfisher A330 with those wonderful Red J class seats. Arik would be wise to get as many ex- Kingfisher A330's as it can.
 
Vimanav
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 6:43 pm

Quoting jfk777 (Reply 35):
A sad ending to what was India's brightest star in teh airline industry, an Indian Richard Branson. Mr. Mallya's ideas will live on in some planes he never took delivery of helping Arik Air of Nigeria.

KFA was never the brightest star in India's airline industry. It was the best dressed and most dolled up entity in borrowed clothes. If one discounts the unwarranted pampering (at those fares) which won IT quite a fan following, the company is a classic example on how the irresopnsible actions of one impacts the profitability, credibility and image of the entire airline industry in India.

World class services come at a cost. Lets face it, we Indians want the moon at the price of a mango. When somebody is idiotic enough to give it to us at that price, we love the guy to death without ever thinking about its sustainability. And then we eulogise him when he nose dives and crashes. The real tragedy here is the 4000 staff whose careers are screwed in this crash. Mallya with his fake Doctorate may think he'll get away... But there is Somebody up there who he'd have to contend with. And He does not take bribes...

Vimanav
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sankaps
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 9:09 pm

Quoting Vimanav (Reply 36):
KFA was never the brightest star in India's airline industry. It was the best dressed and most dolled up entity in borrowed clothes. If one discounts the unwarranted pampering (at those fares) which won IT quite a fan following, the company is a classic example on how the irresopnsible actions of one impacts the profitability, credibility and image of the entire airline industry in India.

Well said, Vimanav. Any fool can spend money recklessly to provide the best service in the skies regardless of market and economic realities. Making a profit and running a sustainable airline is another thing altogether.

In the meantime, the KF CEO has written another wildly optimistic letter to the staff: http://profit.ndtv.com/news/corporat...yees-asks-them-to-join-work-311873

Desperate appeal, but Mallya can't afford the airline to fail as it will be the string that unravels the entire UB Group! But he does not have the funds or ability (or staff or customer support) to keep it going either. He is, to put it politely, screwed! Only a bigger fool with more money than brains would invest in Kingfisher!
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Tue Oct 09, 2012 9:09 pm

Quoting Vimanav (Reply 36):
KFA was never the brightest star in India's airline industry. It was the best dressed and most dolled up entity in borrowed clothes. If one discounts the unwarranted pampering (at those fares) which won IT quite a fan following, the company is a classic example on how the irresopnsible actions of one impacts the profitability, credibility and image of the entire airline industry in India.

World class services come at a cost. Lets face it, we Indians want the moon at the price of a mango. When somebody is idiotic enough to give it to us at that price, we love the guy to death without ever thinking about its sustainability. And then we eulogise him when he nose dives and crashes. The real tragedy here is the 4000 staff whose careers are screwed in this crash. Mallya with his fake Doctorate may think he'll get away... But there is Somebody up there who he'd have to contend with. And He does not take bribes...

Well said!
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goacom
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 3:10 am

KF is getting what it is due. This extravagant airline was simply not sustainable. I remember flying it when it just started service and I kept telling myself, wow, amazing service, great food, tons of ground staff and support etc. But I also wondered, how the hell can they make money?

Now, regarding Aerobloggers claim that the private airlines in India are favored over the government airline (AI), the facts are just the opposite. AI has received 10s of billions in dollars in state aid in the form of loan guarantees and cash infusions. Without government support, AI would not be able to get a loan to fund its aircraft, or would have to pay rates that are much higher than the sovereign rate. KF (IT) has also been the beneficiary of government aid via loans from state banks. However, the aid that AI has received is an order of magnitude higher. The billions in aid to AI has in part contributed to skewing the market, by putting downward pressure on prices.

Quoting aeroblogger (Reply 22):
On your side of the world, the most notable state-owned carrier is AR, and the Government of Argentina makes all kinds of ridiculous policies to favor AR over its private competitors... I can definitely see where a bias against state-owned carriers would come from.

However, in India, the private carriers are favored over the national carrier. It's because corruption is so ingrained in our system - who will pay a bribe to the government on behalf of the government Who will pay off the media? And worst of all, who cares? There is a lot of apathy in India about all these issues, because people have just given up. Nowadays, I look at the paper, see the latest billion dollar scam, and turn the page. It's not news any more.
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 3:24 am

Quoting goacom (Reply 39):

Now, regarding Aerobloggers claim that the private airlines in India are favored over the government airline (AI), the facts are just the opposite.

I have to disagree.
While all of this is true:

Quoting goacom (Reply 39):
AI has received 10s of billions in dollars in state aid in the form of loan guarantees and cash infusions. Without government support, AI would not be able to get a loan to fund its aircraft, or would have to pay rates that are much higher than the sovereign rate. KF (IT) has also been the beneficiary of government aid via loans from state banks. However, the aid that AI has received is an order of magnitude higher. The billions in aid to AI has in part contributed to skewing the market, by putting downward pressure on prices.

You are ignoring the most important market reality of all - and that is corruption. It is so tightly bound to our system that it is more important than any commercial or economic argument can ever be. In fact, if Vijay Mallya has taken more advantage of the corrupt realities of our system, it would have been possible to make money hand over fist with even the most unsustainable business model.
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art
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 8:39 am

Quoting aeroblogger (Reply 40):
You are ignoring the most important market reality of all - and that is corruption. It is so tightly bound to our system that it is more important than any commercial or economic argument can ever be. In fact, if Vijay Mallya has taken more advantage of the corrupt realities of our system, it would have been possible to make money hand over fist with even the most unsustainable business model.

Sad to hear that support for corruption more or less guarantees the success of your venture in India. However, unless Air India is an exception, it has not worked for them. Do I recall correctly reading that AI had accumulated debts of US$14 billion?
 
sankaps
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 9:38 am

Quoting goacom (Reply 39):
KF is getting what it is due. This extravagant airline was simply not sustainable. I remember flying it when it just started service and I kept telling myself, wow, amazing service, great food, tons of ground staff and support etc. But I also wondered, how the hell can they make money?

Exactly! I remember being singularly unimpressed when at CCU airport there were half a dozen "Kingfisher Girls" (ground staff) standing around baggage claim, but no sign of baggage for a long time, and no information from them on what was going on either. Just standing around looking as clueless as the passengers. And when the baggage finally came, it was not clear what they were still standing there for as they did not offer anyone any assistance and no one went to them. Just hanging around there, looking dumb, just Mallya's ego and libido on display.
 
comorin
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 10:34 am

Quoting aeroblogger (Reply 9):
Quoting comorin (Reply 7):
Really? I wasn't aware of that.

SBI and other state owned banks own a significant share of KFA.

I'd like to know more about that, could you kindly provide a link? Was there a debt-equity swap?
 
sankaps
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 1:08 pm

Quoting comorin (Reply 43):
I'd like to know more about that, could you kindly provide a link? Was there a debt-equity swap?

I think he meant that state-owned SBI and by extension the Indian Gov have significant stakes in the future of KF, in that the banks, which have over $1B in loans to KF, will be hosed if KF goes under!

It is also being suggested that the only way for KF to reduce its debt liabilities is by converting debt to equity, though frankly there is too much debt and too little value in KF for that to be a realistic option without the banks being forced to take a humongous haircut!
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 2:19 pm

Quoting art (Reply 41):
Sad to hear that support for corruption more or less guarantees the success of your venture in India. However, unless Air India is an exception, it has not worked for them. Do I recall correctly reading that AI had accumulated debts of US$14 billion?

Air India is a government company, so it cannot take advantage of corruption. It would be awfully strange if the government was bribing itself :P

Quoting comorin (Reply 43):
I'd like to know more about that, could you kindly provide a link? Was there a debt-equity swap?

Yes, it was a debt equity swap. State-owned banks now own almost 30% of the carrier, in addition to the over 7k crore in loans they gave as sankaps mentioned...
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goacom
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 3:22 pm

Kingfisher is the tip of the iceberg. AI's debts are 10x higher than Kingfisher. Given the lack of substantial changes at AI, only an ostrich with its head in the sand can expect it to be profitable anytime soon. AI's continued mismanagement could come back to haunt India.

‘Titanic’ Defaults Loom on Restructured India Bank Debt

http://www.bloomberg.com/news/2012-1...-restructured-india-bank-debt.html

India’s Kingfisher Airlines Ltd. (KAIR) escaped collapse in 2010 by restructuring 77.2 billion rupees ($1.4 billion) of debt it had run up buying airlines and adding routes amid the nation’s economic boom.
Less than two years later, the carrier controlled by billionaire Vijay Mallya was back in talks with creditors, while its net debt had increased by 9 billion rupees. The airline this month grounded its entire fleet after pilots went on strike to demand seven months of unpaid salaries, and was given time until the end of October by its creditors to submit a funding plan.

Kingfisher is among Indian companies resorting to an out- of-court loan-restructuring process that bankers and regulators say is too lenient on borrowers, leading to restructured debt that has more than doubled since March 2009. A fifth of the credit may sour as the economy falters and crimp profits at government-controlled lenders such as State Bank of India that account for three-quarters of the nation’s loans and deposits.

“No single lender can afford a large company going under, a la Titanic,” A.S.V. Krishnan, senior research analyst at Ambit Capital Pvt. in Mumbai, said in an interview last week. “Lenders have overdone restructuring, and it is coming to roost now on their balance sheets.”
 
Vimanav
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 6:26 pm

Quoting goacom (Reply 39):
Now, regarding Aerobloggers claim that the private airlines in India are favored over the government airline (AI), the facts are just the opposite.

No Aerobloggers claim is perfectly factual. Erstwhile Minister of Civil Aviation Peepee systematically dismantled IC and AI's profitable routes and replaced them with 9W and IT's services. Various routes to BKK from India being a prime example. At the same time the thousands of crores pumped into the national carrier by the Government were to fund capital purchases which in turn funnelled back a few hundred crores to the private coffers of the very same folks in the Government. While the big boys fiddled around with capital purchases, the minnows who ran day to day affairs went about with heavy discounting and other pricing actions which further drove the airline - and the market into the red. This bit did not bother the big fish who were anyway raking it in buying aircraft, engines, rebranding, merging and trying every conceivable position in the Kamasutra with the national carrier.

Quoting goacom (Reply 46):
Kingfisher is the tip of the iceberg. AI's debts are 10x higher than Kingfisher. Given the lack of substantial changes at AI, only an ostrich with its head in the sand can expect it to be profitable anytime soon. AI's continued mismanagement could come back to haunt India.

Kingfisher is a contaminated, toxic and worthless iceberg. AI can at least be melted for fresh water. For all its debts and losses AI still has significant assets ranging from rare paintings to the Air India building. If you put AI up for sale, it will still find a long line of buyers outside its door. IT has nothing... no airplanes, no assets worth the name that will even come to a fraction of their debts. The only hope for them lies in random acts of utter idiocy that very rich people or companies around the globe often indulge in when they decide to pump in money into totally lost causes.

Vimanav
Sarfaroshi kii tamannaa ab hamaare dil mein hai, Dekhnaa hai zor kitnaa baazu-e-qaatil mein hai
 
aeroblogger
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 6:33 pm

Quoting Vimanav (Reply 47):

Kingfisher is a contaminated, toxic and worthless iceberg. AI can at least be melted for fresh water. For all its debts and losses AI still has significant assets ranging from rare paintings to the Air India building.

Exactly. AI has a valuable route network, fleet, and infrastructure which would be attractive to a potential investor.

Quoting Vimanav (Reply 47):
If you put AI up for sale, it will still find a long line of buyers outside its door.

I think this is a bit overly optimistic... AI isn't in condition to be sold right now.

The whole purpose of the restructuring plan passed this year is to get the airline ready for partial privatization. If you look at what the restructuring entails, it is mostly getting the operation in order, not the finances. If AI has a solid operation, valuable network, fleet, infrastructure, etc., and GoI writes off (a significant portion of) the debt, AI will be in a position to thrive in the Indian market.
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blrsea
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RE: Kingfisher Could Stop Flying Oct 20

Wed Oct 10, 2012 6:37 pm

Many people don't understand how corruption works in India. Private carriers are favoured because they can offer huge bribes. Now, in that environment, if the state owned AI goes down, what impact will it have personally to the people in charge? Nothing, because the state owned airline will be bailed out by taxpayers money. So, even if AI accumulates $1 or $4 billion in debt, it will have to be paid by taxpayers as Govt of India has guaranteed the loan. And people running AI can still make money through corruption, by awarding various contracts to favoured companies, taking airplanes on dry/wet leases when none are required etc.

So, compared to pre-liberalization times when AI/IC were the only carriers, it is more profitable now for people in charge as there are many more private airlines willing to grease their palms. Policies can be made & changed depending on who has the deepest pockets (e.g., 5-year rule on flying abroad, opening up only certain routes to private airlines, AI changing timings of profit making routes so that private airlines can operate profitably etc).

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