KINGFISHER STORY

Why is Kingfisher Airlines facing bad times?
Thursday, March 01, 2012
Suhaib A Ilyasi

Bureaucracy Today was the first publication to report the spiralling ATF overdues by Kingfisher Airlines to be paid to various public sector oil companies like the BPCL, IOC and HPCL. While the BPCL and the IOC have recovered most of their dues, the HPCL is still struggling hard to get its money back. Much of the credit for the exposé goes to whistleblower and former HPCL Chief Operations Manager Ravi Shrivastava who also happens to be on the BT cover of this month. This man blew the lid off from the fact that how PSUs were running the airlines all by themselves without any dues being paid.
Even when KFA owner Vijay Mallya claims that the turbulence being faced by Kingfisher Airlines would soon be over, and it may be as well for the time being, and the airline will start flying high again, the question is for how long? The fact that Kingfisher’s flawed business model has created most of its problems in current times is resonated by civil aviation industry experts. Several of them agree that the flamboyance for which Mallya aspired with his airline division was too high on his ambitions. His formula of low load factors with low fares and being high on flamboyance proved all wrong as the KFA balance sheet went nose-diving leading to a state of chaos and uncertainty.
What does the Government have to learn from all this? One really wonders why the Government had to be so benevolent to a private airline when the national carrier, Air India, which is looming under abysmal losses, has also lost the confidence of its employees, stakeholders and industry peers. The awkward situation poses a big question mark on the Government’s aviation policy to attract 49 per cent foreign direct investment. The Government would also need to look at losses to the Indian oil companies if jet fuel is allowed to be imported!
It is time the Government thought of reviving the civil aviation industry’s lost sheen and pride by bringing Air India back on track. It must now retrospect on its policy for this industry at large.


Suhaib A. Ilyasi
Editor-in-chief