Should banks give Kingfisher Airlines another chance

Asia files

He is the beer king, party beast and billionaire. However, Vijay Mallya's fame is crumbling. Because the airline Kingfisher Airlines of the flamboyant Indian is getting into a tailspin faster and faster. Now the banks are supposed to inject more money - the company will need around 10 billion rupees. Even years ago, the airline was seen as the flagship of a new private economy on the subcontinent.

From Christoph Hein

Some laugh at him, his flaunted vanity, his diamonds. The others are annoyed with him because his companies are all in the chalk and don't like paying bills. Then there are the droolers who get involved with him, want to become big and powerful in his slipstream. And those for whom he is an idol, a role model in terms of joie de vivre, farmer savvy and assertiveness. Vijay Mallya, Indian billionaire, charming playboy, tough CEO, owner of the United Breweries brewery chain, Kingfisher Airlines, a racehorse stud farm, an art collection and half a Formula 1 team, the self-proclaimed "king of good times", leaves no one indifferent. Now the king stands without clothes.

Because for Mallyas Kingfisher Airlines, the second largest Indian airline, and for years the top dog among the new private lines in India, the air is getting thin. Kingfisher run out of funds again. Thousands of passengers were left sitting last week because Kingfisher canceled dozens of flights. On Friday, the Indian daily Economic Times reported that leasing companies were demanding the return of the machines they had rented to Kingfisher. More than a hundred pilots have left the company in the past few months. The share temporarily lost 19 percent of its value in trading on the Bombay (Mumbai) stock exchange over the weekend. Since the beginning of the year it has already given way 72 percent. In the hope of your deal with the banks, the paper gained 7 percent on Monday. However, the share is currently trading at its lowest level since the airline went public in 2006.

Kapil Kaul, an analyst at the Center for Asia Pacific Aviation in Delhi, assumes that Kingfisher will survive. But: “The situation is very serious. We are just at the height of the travel season in India. And they have had to cancel up to 40 percent of their flights. " Vayalar Ravi, the Indian minister for civil aviation, has meanwhile declared that he would knock on the knock at the all-powerful finance minister and talk to him about help for the ailing airline. He's been doing this a lot lately.

Because the finance minister must also help the state Air India. She is also terribly in debt, and since she was expelled from the Lufthansa Star Alliance membership program, her reputation has also been ruined - which the Indians do not forgive the Lufthansa employees. While the Indian middle class is growing and growing and trying to bridge the chaotic infrastructure in their country with flights, the Indian airlines - just like most airports - are hopelessly overwhelmed by the onslaught. Indian airlines fail to turn a 19 percent increase in passenger numbers into profits. Because they suffer from their self-staged price war, mismanagement and infrastructure problems, high taxes on jet fuel and the 11 percent depreciation of the rupee against the dollar this year alone.

“The whole industry suffers from high costs and lower margins. We are no exception ”, Kingfisher CEO Sanjay Aggarwal sums up the situation dryly. "In India airlines are taxed too high and exempt," says billionaire Mallya on Twitter. Once again, the banks are now in demand, who once cheered and pumped Kingfisher up to orders for the A 380 and an envisaged worldwide network. This is probably Kingfisher's only chance - too big to fail. Because from the financial institutions around the world to leasing companies and the Indian state to Airbus, there is a huge interest in keeping the line in the air.

Mallya wanted to do everything better. His stewardesses were reportedly handpicked. He asks his passengers to contact him personally by email if they are dissatisfied. His email inbox is currently likely to overflow. Nevertheless, this does not prevent the billionaire with his wealth displayed as brilliant jewelry from indulging in his hobbies. Just two weeks ago he was the celebrated star with the Force India racing team on the new Formula 1 track just outside Delhi. But he has also had to sell half of his team. The 55-year-old has now increased his personal commitments for Kingfisher Airlines to 61.7 billion rupees (900 million euros). Its core business, the alcohol company United Breweries, doubled to 168.5 billion rupees. UB holds 40 percent of Kingfisher Airlines, which is named after UB's leading beer brand. Kingfisher's planes were supposed to advertise UB - real alcohol advertising is banned in large parts of India.

When it was founded in 2005 it still looked as if there was nowhere else to make money as quickly in India as in business with private airlines. Mismanagement on the one hand, the bureaucratic state on the other, is now causing the lines to fail. Only the Air India crisis, now the tailspin of India's favorite billionaire Mallya, could become a wake-up call. The only open question is whether the state hears him. Or only investors and banks hear it, who then become more cautious.

 

 

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King without clothes

From Christoph Hein

He is the beer king, party beast and billionaire. However, Vijay Mallya's fame is crumbling. Because the airline Kingfisher Airlines of the flamboyant Indian is getting into a tailspin faster and faster. Now the banks are supposed to inject more money - the company will need around 10 billion rupees. Even years ago, the airline was seen as the flagship of a new private economy on the subcontinent.

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