Kingfisher Airlines : A dream that never really flew

The inevitable has finally happened. With the DGCA cancelling the flying license of the beleaguered airline from Bangalore, it effectively puts the lid on a chapter which has led to the biggest aviation crisis in India ever [No, I am not forgetting the Air India debacle, but this one especially could have been saved unlike the story of the “maharaja”.]

This might sound cliched, but I only hold Vijay Mallya to be responsible for where his airline is, today. That said, we all know its not the last we are seeing of him, but certainly the last we will be seeing of his airline. Optimists can say that there will finally emerge a buyer for KFA and that we can see it flying again, but this time both the pessimist and the realist would have firmly put the lid on the future of the Fly Kingfisher brand. All those planes grounded in Mumbai shall remain so, for a considerable amount of time, from what it looks like. One might wonder how the airline reached rock bottom in a matter of 3 years. I have a few answers to it, not all ofcourse, but definitely a few teething questions which are always worth having a look at. The comparison of the business models of Kingfisher Airlines and IndiGO, which is supposedly the world’s fastest growing airline (true story! ) gives a very interesting perspective on the whole story.

Kingfisher Airlines : The debacle

Kingfisher started as a full service carrier in 2005, offering single class configuration on all flights. Not a year later they were back tinkering that model and going on the lines of airlines such as Emirates or Singapore Airlines, offering five star travel facilities for its users. Facilities included live in – flight entertainment, virtually the first time ever in the asian subcontinent for all flights. It was an instant hit with the business travellers’ segment who were already disappointed with the monopoly of Jet Airways and Sahara back then. Quite obviously that the airline suffered losses in its first year of operation due to its nascency.

Year 2006 saw Kingfisher getting into serious talks at the prospect of acquiring Air Deccan. Air Deccan, the premier low cost airline in the country at that time had started getting slippery and Capt Gopinath, in my opinion, was the most street smart man on earth to have thought of bailing out, seizing the opportunity at just the right moment. I say this because Air Deccan worked on a business model which was virtually opposing the KFA model. Gopinath’s Deccan was built around a single fleet,  no frills, cost minimized approach which made flying accessible for the first time to every economic class of people in the country. I remember how my grandmother’s sister flew for the first time in her life, thanks to Deccan.

And Mallya was serious about acquiring this airline, which any expert in aviation would have advised against. Anyway, he went with his gut feel and acquired the airline in 2007. The main idea surely was to gain more market power with the increased fleet strength of 70 odd jets in the sky. But that opened up three segments for Mallya: Kingfisher First (Business Class), Kingfisher Premium (Economy Class) and Kingfisher Red, the new low cost entrant from the residues of Air Deccan. 2008 and 2009 were by far, the best years for KFA despite the merger with Deccan. He had a lion’s share in the aviation market and Mallya quite rightly brandished that feeling of power in his hands. Awards and accolades did come in his way and all looked promising for a while.

Three different business models with none being sound had already had chaos written all over it. Mallya was the only one who denied anything of this sort. Year 2010 saw his fleet strength go down and the re-emergence of Jet airways at the top. What was also significant was this little airline called IndiGO. IndiGO had an outstanding passenger throughput exceeding 90% on all flights and had the best on – time flight record. Addition of international routes did not do much of a favour to KFA and it continued to rapidly decline market share wise. 2011 was the first year when they seriously started reporting cash flow issues and simply attributed that problem to the rising fuel costs. I agree, rising fuel costs was an issue, but certainly not the only one. Had it been the only one, other airlines should have suffered equally as well. Airlines like the Jet Airways and IndiGO had continued to flourish in comparison with KFA. And that was due to the age of the fleet. IndiGO, for example has an average fleet age of around 2.4 years, SpiceJet has around 3 and I am sure none of us want to even think of Air India. The older the fleet, the more the fuel, the more the cost. Simple logic.

And so, the pilots left, flights and payments got delayed and the way downhill was almost inevitable now for Kingfisher. Curtailment of schedules, ensuing strikes by employees over the non payment of compensations has brought the airline to a grinding halt.

Business Model Analysis -Kingfisher

  1. If there is one aspect at which we could pinpoint the demise of KFA to apart from Dr. Mallya, it would be the failure of the company to read the business models carefully before they went into acquisition. The KFA model was a blind adaptation of the internationally successful airline business models and lacked any localization to the region it was operating on. I mean, why would an airline acquire a low cost company which made money on flying to airports such as Rajahmundry, Gulbarga, Trichy Vijayawada & Coimbatore and then put those flights to compete with the regular Delhi – Mumbai, Bangalore – Delhi routes?  It was astounding, the confidence of KFA on the low cost brand that it blew away all the Air Deccan strategies and created a few themselves, which misfired.
  2. Another most common flaw that is easily pointed out is the fleet mix and the dream of buying jets at a nascent stage rather than leasing them. This was effectively the reason to shut down Paramount Airways, if we remember. And more than that, successful carriers which fly low cost have always adopted a single fleet composition. All the leading low cost carriers in the world like Southwest (B737), Easyjet and Ryanair (A319/320) have all gone in with this diktat and it works. Because, single fleet reduces the costs involved in training of personnel and also on the maintenance aspects. KFA was too young to take more than 5 different types of Airbus’ and work without incurring huge losses. A good deal of it would have been negated with a sound business model and marketing strategy, but KFA sadly had none of it.
  3. The lack of technical expertise on the airline affairs. It won’t be surprising knowing the nature of Dr. Mallya that KFA had only two CEO’s in total for all the airline departments and Mallya insisted on running the airline most of the time. This might sound very familiar to that when Air India is run by a politician, and assisted by bureaucrats instead of a group of aviation experts, as is the practice with other airlines. Mallya might be gifted in many ways, but surely not gifted enough to manage an airline since he lacks the formal training in doing so.

Business Model Analysis – IndiGO

  1. IndiGO had a business model which was clearly a no – nonsense one at it. Single class configuration, no frills, quick turnaorund times (25-30 minutes in Indian airports is like magic), They leased flights instead of buying them and vowed to add one flight every four to six weeks. Possessing a very quirky advertising and marketing campaign, IndiGO quickly got onto the top ranks by possessing a record for the biggest percentage of on time flight records. This can only be attributed to the rapid turnarounds observed, which is one of the signs of a sound business model.
  2. They had a CEO on board as early as 18 months before they commenced operations. Not just that, they did not believe in exploding to life with a big bang as Kingfisher did. They were rather skeptical of slipping down and thus took baby steps into the aviation industry in India. Acquiring jets was not their  forte and instead they decided to lease them in the beginning, for leasing was a far more cost effective solution.Working this way up to the top has ensured a very firm base from where IndiGO can command and exert exceptional control over its strategies and the overall aviation scenario in India. And this has precisely got it into the position of the leading airline in the country, the fastest growing airline in the world in the world and quite obviously, the only airline in India to register profits.
  3. The gawkiness in getting deals done the way they want deserves a special mention because they have managed to do just exactly that. With 220 orders for the A 320 family lined up [one of the biggest deals ever], they managed to strike one of the best deals in aviation history with Airbus, as part of their expansion programs started in 2010, four years since their inception into the flying business. Whereas Kingfisher managed to reduce its fleets by 4 years because they had bought all of it and were experiencing mounting losses already.

Thus, quite clearly the demise of Kingfisher had everything to do with a flawed business model and the inability of it to live upto the needs and wants of the growing and increasingly ever-so-complicating global airline sector.

Safety on trains cannot wait

I was trying to imagine the ill fate of those 32 who perished in the Tamil Nadu Express fire today morning. What wrong could they have done, to have found themselves on the S11 coach of the train? The scenes of the fire were rather gory, pictures seen across the media houses of the country over the course of this day. Many more have been injured, some miraculously escaped through the skin of their teeth and the rest were not lucky enough to get through this. For a railway network, which focusses on new trains to the home state of the railway minister amongst other states and some other measures, safety could be one of the core issues which might require an urgent look in and addressed in the truest of senses.
This is not an attempt to point fingers at the Railway Ministry or the officials in the Railways or even the government over their usually callous attitude to everything that happens around them. But this incident could have happened in a general compartment next door (since S11 should be presumably next to the general compartment, in a 24 coach train such as the Tamil Nadu Express) instead and it could have been catastrophic. I believe, that at any point in time, there are atleast 150 people, if not less travelling in these general compartments. That is no way a justification that something like this could happen in a sleeper compartment and we be mum over the issue.
I had read a couple of months ago, at the prospect of introducing fire proof coaches in the mails and express trains of the Indian Railways. Tamil Nadu Express, being a priority train for the government (Yes, there are always trains from a state which have higher priorities over the others. For ex: 12623/24 Trivandrum – Chennai Mail has a priority over every other train running in that section) should have been one of the first beneficiaries of this, had the implementation been properly executed on the ground. And maybe, this article may have never even come up here. Railway authorities may point out that the number of accidents have decreased – as they have tried to show here right after the accident, but there still is room for making sure this issue of safety completely foolproof to a very good degree.

One more fast-unto-death, Mister Anna Hazare??

So, this joke called Anna Hazare decides to go on a fast-unto-death from tomorrow, his second or third fast with absolutely no results one must point out. Relentless. Earlier, the government used to atleast budge a little to his demands. That was until he did not have corruption in his own backyard. And once that got proven, nobody ever gave him a fuck too. That is actually the story of our country. We have a grand beginning to anything that happens. Although its a matter of time until it fizzles out as well. I had predicted this as early as August last year, in my article here.
 
In this case, any sensible man would have taken to account the sheer impossibility of the objectives, anna had set during his campaign. His dream of being a second mahatma, riding on the wave of a corrupt free India backfired for the first time really when we discovered the contradictions and the varying opinions coming out from the Anna camp. It gave the impression that the team had immense differences in opinion and never had a sound agreement over the core issue. His second mistake – joining hands with Baba Ramdev. Baba Ramdev himself has unaccounted assets worth billions in both land and money as far as the Scottish Isles. Ridding the country of black money would have had to start from their own backyard, something which is shameful enough to begin a possible downfall. 
 
 
Third and the most lethal one in my opinion was his dream of being a political alternative. Although it sounded very well, considering how much this country is fed up with the two major political powerhouses, one still cannot accept the reality of seeing a third alternative. And sadly, the third alternative will always be seen as the third best in this country. That explains the lean crowds that he has begun to experience for the first time since the campaign took off. He is not used to the thin attendances. And I am pretty sure there won’t be many takers for his fast-unto-death drama, starting tomorrow. With the recent digs at the media as well, apart from the political babus of the country, I believe they have managed to dig a deeper hole into their miseries. One wonders why they still vouch for media presence when all they have been doing is to trash them including. Subramaniam Swamy called them naxalites, in one of his recent meetings. I wouldn’t say the term naxalites is descriptive of team Anna and their campaign, but they sure seem no real alternative in this mega cauldron geopolitik environment prevailing in this country.   
 
My thoughts today are with those people who might eventually turn up for his fast-unto-death hoping for a change. This word change was first defined by Barack Obama in his political campaign in 2007. To be honest, there was no change at all since his election into office, if not for more wars and bloodshed. I would just like to tell these people that the change is a myth that certain people promise you, in lieu of seeking few personal benefits for themselves. The verdict is already out in the open for you all to take it and make an informed sensible decision on this regard. Its hot in Delhi – so sit back at home and relax with friends & family. Learn to accept the realities of life as they come in front of you and try to accommodate them in the best possible manner.   

Inducing Happiness: The European Way

It is the process by which people tend to “induce” happiness into their lives at the cost of their fellow beings and then feel good about it rather than deriving happiness by “making” it happen by means of your sincere deeds – quite the European way as I have been observing since September.
Thing is simple. A few weeks ago, I received this mail from a friend based out of Lisbon which read like this:

Hello guys.. As you know I am leaving for the States next week. You guys have been really awesome and I have no words to express my gratitude for all the support and love. I sure am gonna miss you all when I am in Boston. I was thinking that it would be good if we can all meet up one last time for a dinner. I will be very happy and fortunate to have you amidst the company of me and my friends, during the last moments of my stay in Portugal.

I propose that we meet on Saturday at around 2000 at <Restaurant Name> <Address>. The choice of the cuisine is meditteranean as most of you would prefer, includes <general menu>. And the cost per person would be around 20 euros, not more than that inclusive of drinks. 

This man in the letter included  the “You guys have been awesome….my gratitude..support and love“, ” I would be very happy and fortunate….” and then delivered the sucker punch by announcing the “cost per person….” sentence – all in the span of 5-6 lines of the same letter. And letters/mails like these come, every other week.
Well if he was so happy and fortunate and sad that he would miss all of us, he should have hosted a dinner and paid up the expenses by himself. Atleast that is what is done if you are genuinely happy back where I hail from. You invite your friends and spend a wonderful evening with them, spreading laughter and cheer and then you make it even more wonderful by being the perfect host and appreciating their decision to spend quality time with you. I would pay to do this, but then my idea of not believing in celebrations makes life a lot more easier. Why do it when you want to “induce” rather than make it happen by itself?
So to sum up, I ended up going for the dinner because he has been a wonderful man and for the sake of his happiness, I ended up spending 20 euros (1350 INR). That is the price that I burn to see a smile on his face and make sure everything is right between us. Am I happy doing this? Well, you know by now….

Dear BCCI,

A letter from an anguished cricket fan, seeing the state of affairs of the game and the callous attitude of the governing body…

For the sake of the future of the game in this country beyond Sachin Tendulkar and Rahul Dravid, please ensure that you take a leaf out of Cricket Australia is forcing them to take off, towards other aspects of the game. When they could get rid of Ricky Ponting – arguably the greatest ever after Tendulkar and Lara, despite him scoring two centuries inclusive of a double in the recently concluded test series, you could man up to do this as well. Make no mistake when I say this – Sachin is god as far as I am concerned, but the time has come to look beyond him, to the rest of the guys in the team.
And its not that our subjects have been performing exceedingly well as well. So it should be making your job a lot more easier. The time has come to put off your selfish materialistic mindset about the game and work on motivating the average Indian to take a lot of pride from the wonderful game. As of now, I don’t see myself watching the game anymore after Tendulkar is done and dusted and I hold you completely responsible for my decision. The main reason being that you have never thought of looking beyond the “fab four” when it came to marketing the game into the billions. Maybe it was due to the fact that they could single handedly drive the country into euphoria. But then, what needs to be realized is my views on watching the game post the Tendulkar era are echoed by millions of fans the world over. And if you don’t step up to act on this aspect, as an ardent fan of the beautiful game I am afraid to say the future of Indian cricket looks very very bleak.
And I do not understand the reasons for your haughtiness and arrogance when it came to the abiding by the Woolf Report, your constant opposition to the ways in which ICC affairs are conducted and your persistent opposition to DRS. And it doesn’t end there. Your refusal to set up an inquiry into the double whitewash and your constant bragging about winning the world cup at home turf as a compensation for the shame caused in England and Australia is shocking, to say the least. It tells me how much you care for the future of the game. And when Sahara bailed out of the mess, you went the extra mile in ensuring they got back on track. This at a time when, you had wasted no time in driving the Kochi Tuskers out of the IPL in the name of some financial irregularities. And we all know it was the money more than your concerns of a long term alliance that made you hold their asses for cover.
Sadly, the plot keeps getting thicker and thicker. I wish there was a government legislation which could force you to clip your wings and come under public scrutiny. It is the case with countries like Sri Lanka and South Africa and they seem to be showing results when more able administrators have stepped in. That said, I do hold you completely responsible for taking the game to this level, take no credit away from you. But I also hold you responsible for bringing anguish, frustration and a sense of grief into the average joe out there, who is afraid the good times are slowly getting over.
Yours Sincerely,
An-ardent-cricket-fan-who-is-afraid-for-the-future-of-the-game