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Kingfisher Airlines won't fail: Mallya
Published on Sat, Dec 23, 2006 at 11:16, Updated on Sat, Dec 23, 2006 at 17:27 in Business section
Tags: Kingfisher, Airlines , New Delhi
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New Delhi: Dr Vijay Mallya, the Chairman of United Breweries, has said that his Kingfisher Airlines, despite losses of 347 crores in the first 18 months which, under the impact of rising costs and falling prices, will only have since increased, is “not a mistake”.
He insists “Kingfisher Airlines will never go belly-up”. In an interview to CNN-IBN’s Devil’s Advocate to be broadcast at 2030 hrs IST on Sunday, December 24, Mallya was closely questioned about Kingfisher Airlines.
When it was pointed out that the Airline had lost Rs 347 crores between its start-up in March 2005 and September 2006 and that since then losses have only grown further and was he, therefore, prepared to accept Kingfisher Airlines was a mistake, Mallya said, “The airline was not a mistake…I would not agree with you there at all. Kingfisher Airlines did lose money. It continues to lose money. And I would be wrong if I did not admit it.
However, we are losing a lot less than others. That’s not comforting but the fact is there is a blood bath. There will be a shakeout. We have the staying power and the sustenance that it takes.”
On further questioning, Mallya claimed that Kingfisher Airlines’ “average ticket value … is amongst the highest in the country” and that it was getting “twice the yield of a low fare carrier”.
“Kingfisher is a very well differentiated product and acknowledged (as such). Our average ticket value across our network is amongst the highest in the country. And it (the battle) is only between Jet Airways and Kingfisher. On a typical route we are getting twice the yield of a low fare carrier,” he added.
When pointed out that aviation experts were predicting losses could double in the next two years and several airlines would go belly-up, Mallya insisted that would not happen to Kingfisher Airlines. He went on to claim that Kingfisher had expressions of interest from a number of private equity houses but was in no hurry to clinch a deal because, as he put it, “we aren’t desperately looking for cash”.
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