 Less
than a year after the carrier took off in May 2005, Kingfisher
Airlines says it will go public with an initial public offering
(IPO) within the next three to five months.
"We
are ready to go public with Kingfisher Airlines,” said
outspoken Kingfisher Airlines Ltd.’s Chairman, Dr Vijay
Mallya.
“Within 10 months we already have
a market share of over seven percent and two international awards.
Our customers keep coming back.
Concerned about
the rapid growth of the aviation sector and the lack of airport
improvement, Mr. Mallya believes it is time to move away from
India’s metro gateway airports by adding service to the
subcontinent’s secondary cities.
If there
is one airline entrepreneur who is justifiably vocal about quality
or the lack there of, it is Kingfisher chairman Dr Vijay Mallya.
He told FlyingTypers that Praful Patel,
India Minister for Civil Aviation, had indicated in a conversation
that by 2020, there would be 2,000 commercial aircraft in the
Indian skies.
“The thought that crossed
my mind is that right now we have so many infrastructural hindrances
with less than 200 commercial aircraft flying, when the number
is 2,000 aircraft, how will we cope?”
To
emphasize his point, the Kingfisher CEO said that, according
to the Director General Of Civil Aviation, January 2006 had
seen a 40 percent growth in air traffic over January 2005.
“At the current rate of airport infrastructure
development, in two-and-a-half years, our airports will still
be inadequate to meet demand.
“India needs
to double the capability of its airports right away.
“Those
who have charge of the development of the Delhi and Mumbai airports
need to follow the Singapore example and look 20 years ahead,
building for the future as happened at Changi Airport.”
“Terminals 1 and 2 at Changi are/were perfectly
spacious with plenty of capacity to handle demand.
“Even
so, Singapore continued investing and went ahead and created
Terminal 3.
“Elsewhere Dubai International
Airport is undergoing expansion while nearby a whole new mega-airport
Jebel Ali with huge passenger and cargo capabilities and eight
runways is being built.
“Is India ready
to take such a gigantic leap forward?” queried Dr. Mallya.
“I do not believe,” he said, “that
India’s airport problems will go away overnight.
“Even
if the situation were to improve significantly, we would still
face recurring problems because of our growth,” he said.
With the furious pace at which India’s civil
aviation sector is developing, ever the go-getting entrepreneur,
Dr. Mallya has been keenly interested in any limitation that
may affect his airline’s growth.
There
was no point in relying on Delhi, Mumbai and the four other
metro cities for Kingfisher’s growth,” he said.
“Everybody including the Minister has
said that secondary routes need to be developed.
“But
these secondary routes are too small to absorb large capacity
Airbus aircraft.
“The ATR, therefore,
is suitable for the purpose at hand.
“There
is a lot of wealth residing in India’s Secondary cities.
“To help realize that potential, Kingfisher
ordered 35 ATR’s to connect the secondary cities and,
of course, provide feeder services for our growing Airbus network.”
But we wonder, does the ATR order mean direct
confrontation with the budget carriers?
“Not
at all,” is the immediate reply.
“With
IndiGo coming with their 100 planes, the fight is going to be
for the back seats and we think we are well positioned. |
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“Now
is the time to raise the bar and introduce a first-class product.
“Kingfisher first class will see our aircraft
retro-fitted with the new up front cabin arriving next week
on March 21, 2006.
“We will do a soft launch between
Mumbai and Bangalore and a full-blown launch with four retro-fitted
aircraft in the first week of April this year,”
Kingfisher is planning international
routes as well but still must wait reaching its fifth anniversary
of service to gain government permission to launch service.
Dr. Mallya is chomping at the bit
and would go international tomorrow if allowed.
“No one seems to understand why we are restricted
to five years before going overseas, when carriers from the
Gulf, Southeast Asia, etc. who have been formed recently are
flying into India and snatching up all our traffic.
“Indian wealth being spent on overseas travel
is actually going to benefit foreign carriers and not Indian
companies.
“If Kingfisher is safety compliant, DGCA
Compliant, why can’t a pilot who flies from Delhi to
Chennai, take the same plane from
Delhi to Singapore?
"We will be getting delivery of Airbus
330 widebodies by September next year. They are meant for
international flights and I can’t just keep them lying
around."
Mr. Mallya has indicated that he will move to
operate out of USA as his base for international operations
in case the Indian government does not give permission.
When asked how long he would wait for the Indian
government to permit Kingfisher Airlines to fly abroad, he
said:
"I am a patient man.
“My patience will last as long as it needs
to.
“I have applied to the government and I
will wait for the clearance."
On the Jet-Sahara deal:
“I had Sahara on paper.
“It was exclusively offered to me first.
“But I could not make the numbers work.
Mr. Subrat Roy (Sahara Chairman) was stuck on
$500 million price tag.
“There is no way in the world that I could
make the numbers work.
“Things for us in that deal just did not
add up.”
According to Dr Mallya, Jet Airways had said that
the carrier’s value lie in Sahara’s pilots, engineers,
and parking, departure and arrival slots.
“But we don’t own slots,” said
Dr Mallya.
“Jet does not own them either.
“Departure slots, airport parking slots are all
owned by the government of India.
“Tomorrow the Ministry of Civil Aviation
could decide to reallocate the slots.
“Nobody has a claim on them.
“How can you put a value to an overnight
parking slot that doesn’t belong to you?
“Sahara just didn’t add up.
“I would have the problem of dealing with
4,500 Sahara staffers whose culture is very different from
the Kingfisher culture.
“Jet and Sahara have competed furiously
for the last 10 years.
“Now they are all under one roof.
“That is why there is so much rumbling.
“Cultural issues should not be undermined
or under-rated.”
(Tirthankar Ghosh)
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