Stake sale may just be the only hope for Kingfisher Airlines to see better days soon. Will the government allow the change in provision? And how soon?
Only the shoe owner knows where the shoe pinches – rather crude
in form and fashion, yet effective and totally apt to explain what airline operators are undergoing in India. And for all these months when we were talking about Mallya being the lucky one who’s shown no wrinkled worry on his face, when all that Kinghfisher was doing was acquiring and buying stakes one after the other, when all that Mallya was busy with cricket and Jet Airways, we arrive at a time when we see the flamboyant ‘Bling of good times’ proving that times indeed weren’t so good!
After sailing through turbulent times for over three years, the flamboyant Vijay Mallya seems desperate for a bailout. And what more, his recent request for the government to allow foreign equity levels upto 25% in domestic aviators, confirms that United Brewery’s cash reserves are finally proving insufficient to support his bleeding aviation business. When 4Ps B&M asked Mallya about the chances that such an amendment might happen, he simply stated that it was upto the government to decide that. “I have been approached by a number of players including British Airways, Singapore Airlines and Virgin Atlantic for a 25% stake purchase in Kingfisher Airlines, but it is entirely the government’s call to let it happen. One should really ask this question to the government,” stated a loud Mallya.
In the light of quarterly losses rising deplorably by 90% to touch Rs.483.2 crore (for Q2, 2008-09), oil bills worth Rs.1,000 crore still due, and over Rs.200 crore still to be paid to the Airports Authority of India, Kingfisher has clearly fallen into some financial pit at the moment. What’s worse, with less that 2% Indians using the air mode today and with fares set to rise again, Kingfisher is witnessing its worst days with company stock prices tumbling at the BSE. Lack of credibility is not where the market doubts Mallya, it’s just that Kingfisher Airlines appears too weak at the moment to stand firm despite the earth moving under its ground. Even ICICI Bank has rejected Kingfisher’s second loan requisition. November 17, 2008 saw Kingfisher fire 50 more co-pilots! Really, it’s time for us to mull over our previous belief that Kingfisher Airlines is uniquely insulated from the current bloodbath in the aviation industry. What’s worse, losses on the international routes have also forced the airline to close down its US office, even before it could commence operations. Speculations are also rife that the airline might be also forced to close down its offices in Hong Kong, Singapore and London too!
Kingfisher has already leased-out three of its five A340-500s aircrafts and two more are likely to be sent back or leased out to cut down its operating costs. And the airline has already been accused of payment defaults by GE aviation. And the bailout? Well, Harshvardhan, Chairman, Starair while explaining why this sort of policy is ‘unwelcome’ explains to 4Ps B&M, “Funding and technical skills are two things that foreign players bring with them. We have enough technical skill and just need funding and for that 49% investments by FIIs are already allowed. Beyond this it will be a threat to national security...” O.K.! Point noted, Sir!
So here is our message to Dear Dr. Mallya: Sir, we understand your predicament, but national security comes first :-) [Well, atleast that’s a good excuse for the Ministry ;-)]
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
Only the shoe owner knows where the shoe pinches – rather crude
in form and fashion, yet effective and totally apt to explain what airline operators are undergoing in India. And for all these months when we were talking about Mallya being the lucky one who’s shown no wrinkled worry on his face, when all that Kinghfisher was doing was acquiring and buying stakes one after the other, when all that Mallya was busy with cricket and Jet Airways, we arrive at a time when we see the flamboyant ‘Bling of good times’ proving that times indeed weren’t so good!After sailing through turbulent times for over three years, the flamboyant Vijay Mallya seems desperate for a bailout. And what more, his recent request for the government to allow foreign equity levels upto 25% in domestic aviators, confirms that United Brewery’s cash reserves are finally proving insufficient to support his bleeding aviation business. When 4Ps B&M asked Mallya about the chances that such an amendment might happen, he simply stated that it was upto the government to decide that. “I have been approached by a number of players including British Airways, Singapore Airlines and Virgin Atlantic for a 25% stake purchase in Kingfisher Airlines, but it is entirely the government’s call to let it happen. One should really ask this question to the government,” stated a loud Mallya.
In the light of quarterly losses rising deplorably by 90% to touch Rs.483.2 crore (for Q2, 2008-09), oil bills worth Rs.1,000 crore still due, and over Rs.200 crore still to be paid to the Airports Authority of India, Kingfisher has clearly fallen into some financial pit at the moment. What’s worse, with less that 2% Indians using the air mode today and with fares set to rise again, Kingfisher is witnessing its worst days with company stock prices tumbling at the BSE. Lack of credibility is not where the market doubts Mallya, it’s just that Kingfisher Airlines appears too weak at the moment to stand firm despite the earth moving under its ground. Even ICICI Bank has rejected Kingfisher’s second loan requisition. November 17, 2008 saw Kingfisher fire 50 more co-pilots! Really, it’s time for us to mull over our previous belief that Kingfisher Airlines is uniquely insulated from the current bloodbath in the aviation industry. What’s worse, losses on the international routes have also forced the airline to close down its US office, even before it could commence operations. Speculations are also rife that the airline might be also forced to close down its offices in Hong Kong, Singapore and London too!
Kingfisher has already leased-out three of its five A340-500s aircrafts and two more are likely to be sent back or leased out to cut down its operating costs. And the airline has already been accused of payment defaults by GE aviation. And the bailout? Well, Harshvardhan, Chairman, Starair while explaining why this sort of policy is ‘unwelcome’ explains to 4Ps B&M, “Funding and technical skills are two things that foreign players bring with them. We have enough technical skill and just need funding and for that 49% investments by FIIs are already allowed. Beyond this it will be a threat to national security...” O.K.! Point noted, Sir!
So here is our message to Dear Dr. Mallya: Sir, we understand your predicament, but national security comes first :-) [Well, atleast that’s a good excuse for the Ministry ;-)]
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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entrepreneurship venture? Internationally of course, you’d have heard of names galore who made their mark in their home garage, but in India? Well, wonderfully, here too, the situation is no different! You’ll get the drift of our argument when you finish this paragraph... When you are born to succeed as an entrepreneur, you learn a thousand ways to achieve your ends, or rather start your golden journey. And Sanjeev Bikhchandani, MD and CEO, Info Edge (India) Ltd. certainly had a few of those tricks up his sleeves. And what degree of solidarity in vision are we talking about? When dotcom startups fell all around like nine pins during the turn of the millenium, Sanjeev’s virtual brainchild held its spot tight, and grew with every passing year. Of course there were the hiccups, but fighting his way to make the most of opportunities was much that he learnt having started operations in the servant quarter above his garage paying Rs.800 as monthly rent in 1990 (Hey! Wait! Did you miss that one? He started operations in the servant quarter above his ‘garage’!)
decipher and understand them. In this case an average MP refers to one who prefers a siesta during key discussions in the Parliament and have utter disregard for national issues at large, barring parroting needless controversies the way Minority Affairs Minister AR Antulay did. But for the remaining few intellectuals who still honour the house with their august presence and for the ones running the country, one just wonder if any of them have ever seen the film "Munich", based on the real life incident of the killing of the Israeli contingent in the Munich Olympics in 1972. This was an act of a Palestinian terror outfit Black September. There is much similarity in the manner in which Munich incident happened and the way the Mumbai terror attacks on 26/11 took place, given the fact that in both cases there were armed terrorists who had stormed into hotels to kill unarmed civilians. Yet, in case of Munich, neither did Israel go around browbeating about an impending strike against Palestine (there is nothing much in Palestine to destroy through air raids either) nor did they try to pressurise the world to act against the leaders of Black September. Instead, Israel formed a covert group with a few former Mossad guys leading the pack and went after the planners, financiers and executors of Black September. In the ensuing months, they executed most.
Bohra community as ‘just your average Muslims’ – conservative, inward looking and, who knows, even fanatical. After all, isn’t that the most common, albeit erroneous picture that is painted to depict an average Muslim? But on a closer look you will realise that this community has learnt the fine art of maintaining a perfect balance between devoutly following the Islamic teachings and keeping pace with the ‘modern’ world.
in one of his writings: “His victory over the Muslims of Bengal and his acquisition of the southern districts of western Bengal must have enormously raised his prestige in the eyes of contemporary Hindu rulers and augmented his resources, which in all likelihood enabled him to undertake the construction of a stupendous structure like the Konark temple, designed to exhibit his power, prestige, opulence, devotion and perhaps to commemorate his victory also.” Abul Fazal, in corroboration to this, even states that it is a “mighty memorial to posterity”.
too far-fetched for most rationalists, all throughout the century gone by. And apart from science fiction, even over half-a-century of cutting edge research could not rupture the meshwire of confusion around what many call robotics. Notwithstanding the frustrations, hard work and neuron burning fixations of numerous mega-brains, advanced positronic devices have still remained the biggest whim of all times and an indigestible food for thought for many! But hey, all was not in vain and today we have some good news! Yes, the fruits of labour have started to pay-off and the first step towards a workable ‘humanoid robot’ prototype has finally been taken...
for the Indian government to learn a lesson. “Why?” you ask? Well, they now seem to be waiting for a few more disasters to happen before they can react. The HRD ministry and the rural development ministry are yet to disburse Rs. 220 billion to Food Corporation of India (FCI). This delay is eventually hampering the supply and distribution of food grains for Mid-Day Meal programmes and employment guarantee schemes. It must be noted that the Mid-Day Meal Scheme is a vital part of primary education across India. Similarly the NREGA and other employment schemes may also fall flat due to late delivery of food grains. Every year the FCI is paid well in advance for the supply of food grains to be distributed through the Public Distribution System (PDS). This delay is also negatively affecting the distribution of food grain to the Armed Forces.
and fumed while running for the bus stand shade in the torrential rains. Pawar like various middle-class Indians has an aspiration to own a car but like others, he too has an income which is just about enough to cover his basic needs. Even though he has saved enough to be soon able to own a bike, Pawar still longs for a car; at least for his family. The want to own a car has never been so strong in India, especially when only 8 people out of 1,000 own a car here! The most hyped car of the season, the ultra cheap Tata Nano is also trying to persuade millions of motorcyclists to upgrade to their first car. Many have already taken the bait and are anxiously waiting for the affordable car to hit the market!