Airline industry
Vijay Mallya’s strike that never took off
As mentioned in my earlier blog, the proposed threat of a strike by the airlines was a bad idea from every point of view. I could not see any logic behind the strike. Airlines do not have great negotiating power. They didn’t hold any trump cards. I agree that they are in a difficult situation and resorted to this desperate act.
Who asked you to fly Vijay Mallaya?
Vijay Mallya has stated, “Sometimes it costs more to fly than not to fly.” Well, I think we never asked him to fly. He entered the airline business of his own free will and he can get out of it at his own free will. If he finds it more economical NOT to fly, he can stop flying and make as much as he wants. However, he can’t form a cartel and blackmail the people of the country. He has been given a licence by the government to run an airline and the same can or should be taken away if Vijay Mallya takes illegal action. He has done this before when he signed an agreement with Jet. Mallya has taken too many liberties just because he knows people in the government.
A lesson for Vijay Mallaya in capitalism
Vijay Mallaya, Chairman of Kingfisher Airline and UB group made a statement in relation to the proposed strike by the airlines on 18/8/2009 made a statement “We want the government to understand what happens when private carriers don’t exist.” I think Vijay Mallaya is losing it or is drunk on the good beer that his companies produce or he seriously doesn’t understand the meaning of capitalism that I have heard him talk about on TV.
Now Airlines want to be in travel business
It has been reported in Economic Times that Kingfisher, SpiceJet and Indigo want to launch a travel portal in order to save on commission. Somehow, it is difficult for me to understand the obsession of airlines to save on travel agent’s commission as if that is the primary reason for the troubles of airlines. It seems that all the airlines think that they will be all become profitable just by eliminating the travel agent’s and travel portal’s commission.
Vijay Mallaya should learn from Paramount
I had earlier written that Vijay Mallaya should learn from Paramount how to run an airline. Today, when Kingfisher is in trouble and Vijay Mallaya owes huge amounts to oil and hotel companies, Paramount Airlines is hiring 80 foreign pilots and 200 local pilots in the current year. Paramount needs pilots because it is adding 10 aircrafts to its existing fleet of six planes and increasing the number of flights from 1800 to 2500 per month by October 2009. It is also expanding slowly and steadily. Last month it launched flights in the eastern region.
Why is the government financing Kingfisher Airline?
Indian Oil Corporation (IOC) has invoked Rs. 50 crore guarantee of Kingfisher after a cheque issued by Kingfisher bounced. It was further reported that Kingfisher owes nearly Rs. 785 crores to the oil companies. I simply do not understand why Vijay Mallaya is getting such heavy credit from the government. The daily interest on Rs. 785 crores at just 12% works out to be Rs. 25 lakhs. Vijay Mallaya is saving this amount. He needs to sell his shares in the company ot sell any of his assets and pay the oil companies. When he owes so much of money, why did he go buy Gandhiji’s articles for Rs. 9 crores?
King of Good Times has become King of Sorrowful Times
Well, it seems that Vijay Mallaya is losing his title of King of Good Times fast. I read in Mint newspaper that his airline Kingfisher owes a lot of money to the hotels his crew members etc used to stay in. I believe he owes nearly Rs. 8 crores to them. It was hinted in the article that the airline was putting pressure on the hotels to give them more discounts. Isn’t this what people call as blackmailing?
Why do airlines need government intervention to tell the truth
I have been unable to understand why airlines do not like telling its prospective customers the total price inclusive of all charges as well as the break-up. Why don’t they disclose the total amount the customer has to pay? What will they gain by hiding the correct amount or the break-up details that the customer has to pay?
King of Good Times becomes King of Hard Times
I was happy that finally Vijay Mallaya was out of the news and that we could concentrate on more important issues rather than discuss about the “King of Hard Times.”
Look who’s crying again?
In my recent post I had stated that the joint action of the airlines in India to increase their fares together was prima facie illegal and unfair practice under MRTP. I was happy to read that MRTP is taking immediate action to investigate the matter. Of course, Aviation Minister Praful Patel also issued a warning but we all know what value that has considering his soft corner for his freind Vijay Mallya. I am also happy to hear that Jet has decided to wear the proverbial “pants” and reversed its decision to increase prices and disaasociate itself from the illegal act.
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