The sources said Kingfisher may be planning a quiet shut down and promoter Vijay Mallya being an ‘accountable’ person has been asked to meet the DGCA to present a clear picture. The whole picture is likely to become clear in few days, the officials added
New Delhi: Ailing Kingfisher Airlines Monday faced the prospects of its flying license being cancelled and its boss Vijay Mallya has been asked by the Directorate General of Civil Aviation (DGCA) to present a clear picture of the cash-strapped private carrier, reports PTI.
The DGCA mulled cancellation of Kingfisher's flying permit after the airline today submitted to it the summer flight schedule with 15 to 16 aircraft as against 28 planes submitted last month.
“The airline not only lacks aircraft, they also lack funds for day-to-day operations. They are failing to meet their flight schedule, causing inconvenience to the passengers and also they failed to give salaries to their employees for past four-five months,” official sources said.
The sources said Kingfisher may be planning a quiet shut down and Mr Mallya being an ‘accountable’ person has been asked to meet the DGCA to present a clear picture.
The whole picture is likely to become clear in few days, the officials said.
The beleaguered airline was served a show-cause notice by the civil aviation regulator DGCA towards the end of February asking why its licence should not be suspended as it had made unannounced cancellations.
The 15-day mandatory notice period has already lapsed and they have failed to give a valid reason for curtailment of their flight schedule, most of their explanations are unsatisfactory and they have not given a definite recovery plan, officials said requesting anonymity said, adding the airline is presently operating only 15 or 16 aircraft.
Facing severe fund crunch, the Vijay Mallya-promoted airline has decided to curtail its overseas flights operations to avoid further losses and also return of a leased aircraft.
According to sources, the airline has planned to suspend its overseas operations from 25th March, except Delhi-London which it is withdrawing from 9th April. Also, the airline would return its wide-bodied airbus A 330-200 aircraft to a lessor in the United Kingdom.
Struggling to stay afloat, around 60 accounts of Kingfisher Airlines have been frozen by the tax authorities for its failure to pay taxes after levying it from the passengers.
Angry over not being paid for four months, airline pilots reported sick, forcing the airline to curtail its scheduled flights.
Mr Mallya at a meeting with the pilots last Friday said their grievances would be looked into but did not set a time frame. He had also said the airline would come out with a crystal clear roadmap for its future in a few days.
Kingfisher has a total debt of about Rs7,057 crore and accumulated losses of about Rs6,000 crore.
Earlier this month, global airlines body IATA suspended Kingfisher for not clearing its dues. This was the second time in just over a month that the airline was suspended on the same count from the IATA Clearing House (ICH) through which airlines and related firms settle accounts for services provided by them to other such companies.
Shares of Kingfisher Airlines today plunged by about 13% to a 52-week low of Rs17.50 on the National Stock Exchange (NSE) as the company faced prospects of its flying licence being cancelled. It was seen trading at Rs18.55, down 7.71% in noon trade. On the BSE, the stock declined 7.96% to Rs18.50.
Mukul Roy, who parried questions on what he plans to do about the hike said, “Whatever I have to say I will say in Parliament as the Railway Budget is the property of Parliament”
New Delhi: Trinamool Congress leader Mukul Roy was Tuesday elevated to cabinet rank to take over as India’s railway minister replacing Dinesh Trivedi, who was forced to resign after Congress succumbed to Mamata Banerjee’s pressure, reports PTI.
Widely expected to roll back at least the lower class passenger fare hike proposed by Mr Trivedi in the Railway Budget, Mr Roy, 57, was sworn in as cabinet minister at a special but brief ceremony by president Pratibha Patil at the Rashtrapati Bhawan.
He was currently serving as Union minister of state for shipping and had earlier served as minister of state in the railway ministry before Mr Trivedi took over last July.
The ceremony was attended by vice-president Hamid Ansari, prime minister Manmohan Singh, the UPA chairperson and cabinet ministers including ministers of Trinamool Congress.
Mr Trivedi was forced out by Trinamool Congress after he incurred the wrath of party chief and West Bengal chief minister Mamata Banerjee who was opposed to his proposal to increase fares in the Railway Budget last Wednesday. Mr Trivedi resigned on Sunday.
The Congress leadership caved in to the Trinamool demand for replacing him with Mr Roy.
On Monday, Ms Banerjee had indicated that the hike in the lower class fares proposed in the Railway budget may be rolled back.
Meanwhile, Mukul Roy today parried questions on what he plans to do about the hike.
“Whatever I have to say I will say in Parliament as the Railway Budget is the property of Parliament,” Mr Roy said.
He was asked if there will be any roll back in the hike in passenger fares.
“Since I am the railway minister, I will reply to the debate,” he said
“Safety, security and punctuality will be my priority as the railway minister,” he said shortly after being sworn in as a minister.
Clearly, spanking new planes are not just the only thing Air India needs, but a professional and experienced airline management team is needed, as well. It needs a strategy rather than random decision making, otherwise, Air India will keep fishing for one-off travellers due to its low fares, but will not be an airline of choice
As a keen follower of aviation events, I landed up in Hyderabad last week for a day trip, with the main intention being to explore the much talked about Boeing 787 planes that Air India (AI) is lucky enough to get an early delivery on. India Aviation 2012 was on, and the Boeing Company brought the plane, which is almost ready for delivery to Air India, painted in the AI colours to showcase to the Indian audience and media. This new airframe which was developed from scratch to provide lighter weight of the plane and save about 15% fuel, Boeing has about 800 planes already on order, and AI will be one of the first few customers to receive these planes in the world, after All Nippon Airways of Japan received theirs in the last few months of 2011.
And still, I am disappointed that Air India will botch it up almost from the word go. I waited for a couple of hours to get my turn on the plane, as the bureaucrats and friends of Air India walked by me into the plane to be demonstrated on the breakthroughs in passenger aviation. I walked around the plane and from the outside, it looked royal. But as soon as I walked in, my heart sank because Air India did manage to disappoint, yet again.
Let’s go back a couple of steps before so that I can make my case. The airline product is basically not just the functional service of “how fast and conveniently you can get there”, but also the experience of getting there. Different airlines go about doing different things to make their passengers feel welcome and comfortable, and the longer you have to be in a metallic tube that flies without the option of change of scenery; the more the flying experience starts to count. Swiss Airlines gives away chocolates to say thank you and Lufthansa boasts of a special terminal for their First Class customers if you are flying at their Frankfurt terminal. Bottomline is that airlines invest a lot of money in developing a product that they hope will bring repeat customers, sometimes for the food, sometimes for the quality of the seat and sometimes for the in-flight entertainment system.
With AI, they had a golden chance to break through their staid image riding on these new planes. Air India’s perception amongst the frequent flyer community is that of an irregular airline which does not treat its passengers well. It gets you there, yes, but that’s about it. With comparable or cheaper prices to travel outside the country and offering a better quality of service, carriers outside the country have been able to gain their marketshare from AI. After all, if you got a better service and could take out the Air India stigma, why wouldn’t you go with the other carrier?
But what Air India did was totally different. I hazard a guess on what happened. In typical bureaucratic fashion, Air India called tenders for installing seats and inflight entertainment products, and went with whatever perhaps was the cheapest; with no regard to design or aesthetics. Another airline, Germany’s Lufthansa, on the other hand, spent 3 billion euros to develop new seats for their business class passengers which they showcased in March 2012, as well. In the process of matching up the colour scheme with the Air India colours, some babu ordered rust-orange and red upholstery for all the seats, and designed a 238-seat large economy cabin on the 787 that looks like it was already used for 10 years before even flying one commercial flight.
People who will pay more money, up to five times more, to travel business class will be disappointed a bit, too. The airline has installed nice comfortable seats in those same orange and red colours upfront. Here, they’ve overlooked other finer ergonomic design aspects. Again, my argument is that these premium travellers would be disappointed and would not come back, or perhaps would choose to fly another airline which will offer them a similar price but a better experience. So, by not investing in making flying a memorable experience, Air India won’t be able to get out of this loss-making black hole because they are giving no reason to the flyers to do so.
The other aspect that will let AI down the loss making path is poor network planning and revenue management. Unconfirmed reports state that Air India will perhaps fly its first international flights on these planes on the Delhi–Melbourne route. This is a route they have been trying to launch for the longest time, but have been unsuccessful. Their direct competition on this sector would be Qantas, which after operating Mumbai–Sydney direct flights till 2010, withdrew from the market since it was losing about $20 million per annum on that route.
Clearly, spanking new planes are not just the only thing Air India needs, but a professional and experienced airline management team is needed, as well. This airline needs a strategy rather than random decision making, and some experts who can make sure the full potential of the tools at their hand are made useful. Otherwise, Air India will keep fishing for one-off travellers due to their low fares, but will not be an airline of choice for the Indian affluent. Till then, my taxes will continue to finance the adventures of Air India.