Some of us have known on Internet of an airline, that was called Kingfisher Airlines? This airline was from India and had as CEO Vijay Mallya, the alcohol beverages excentric tycoon who got the maximum of the extravagancies and burned at the maximum the money in luxuries instead to focus on the airline and on the crew of that airline, and despite being a 5-Star airline, the decisive factors of mismanagement should be viewed by the overall public. I see 3 base causes of this mismanagement:
- Diversion of money from core business
- Ordering too expensive planes (and what happened after)
- Prices too expensive vs other indian airlines (ex: Jet Airways)
1. If the Kingfisher situation was so bad, one of the main causes of this problem was the diversion of needed money from investing and pumping into the core business, wasting them away in un-needed activities, like calendars, luxury and fame events (they cost some dozens, or even hundreds of millions of dollars), and even sponsoring the F1 team. Mallya did this instead of planning a major restructuration for the airline, on the structural level, including the main strategy of the airline to captivate more passengers, because this airline, the passenger level was very, very low (principally in the last years). The indian government did very well to not give them a bailout, but, in my modest opinion should have nationalized the hangars and some planes/crews and infra-structure to be incorporated into Air India’s system to improve quality and also to be better prepared for the Boeing’s 787, and giving them better maintenance (in fact, some of the issues of Air India in the past, were caused due to the poor maintenance, and this 787s were also banned from Japan).
2. Other factor was the bad choices of airliners of this airline company. One of them was, obviously, the A380. The Airbus A380 was really a bad choice, due to the fact of the being only efficient if carried at the maximum pax level. If Kingfisher had passenger-filling issues, the A380 was not the right plane for the airline. In fact, some other airlines are even rejected by this fact. For me, Kingfisher should have ordered smaller airplanes, like the Boeing 787 and Airbus A350, and increase frequencies, if the passenger level improves. The choice of A350 should have been complemented with the order of the Boeing’s 777-300ER to serve some in dense routes, and the Airbus A340-500s ordered, also were a bad idea, due to the maintenance and rising fuel costs. Instead, they should have ordered the Boeing 777-200LR. In regional and domestic level, the ATR-72, was not a good option, because there’s some main levels that can beat the ATR-72, in this particular case the Bombardier DHC-8 Q400. The Q400 is faster than ATR-72, and if is correctly used, in my opinion, can be also more efficient. The only thing good in the fleet (in my modest opinion) was the A330-300, perfect for the medium-haul, and the A320, just to balancing the things. In a conclusion: Airbus loyality in extremis can also be dangerous, at certain point.
About the orders after this Kingfisher debacle: Airbus didn’t cancelled the orders, just reallocated in the “Unidentified Customers” in a desparate hope of the airline being returned to life, a thing that in my opinion, never happened. This thing also happened on orders of Hong Kong Airlines, and also some other bogus airlines who ordered some [sic] oversized Airbuses.
3. The prices onboard were too high to captivate people: In those difficult times, with uneficcient and costly airliners, money diverted to other things, made the airline requiring more elevated prices to sustain the business, but some people couldn’t afford the high prices (due mostly to the Mallya’s misconduct), made the passenger and cargo backlog of the airline tanking and reaching lows. The prices were so high, that the food cost 800 rupees (about US$14) vs Jet Airways, where the airline food costs 300 rupees (US$5) – A 500 rupee (US$9) difference which matters in the choose of the airline for travel, in those difficult times. The merger with Air Deccan was hoping to give them help on lowering prices, and also helping them on the expansion, but also failed to do that due to the lack of corporate governance on the airline, which was also losing money on the running.
So, the Kingfisher Airlines case was, in my opinion, also enough to be a “ruinous management” crime due to the misconduct and bad practices of the corporate people, and also, due to this practices, the constant refusal of Mr. Mallya of the payment of the wages of the cabin crew members, one of the things who also brought Kingfisher to the collapse, as well the things that I said before.
AviationFact Media 