'Kingfisher' in Trouble

[harpoon]

But the Govt. is not doing it.

Hence we have to grin and bear the aunties of AI.

So again its unfair to private players. How do you feel when your competitor even though in as bad shape as you is is repeatedly rescued using public money while you on the otherhand had to account for every single paisa.

Thats why I am for the bailout of KFA..not bcs of the love for Vijay Mallya but bcs I see the whole process being unfair to KFA. The Govt can't disinvest AI..fine but bailout KFA also.

---------- Post added at 01:21 AM ---------- Previous post was at 01:20 AM ----------

The Americans effectively failed themselves.

They failed to regulate the activities of the banks when they were lending credit to every tom, dick and harry.

That's where the American govt. should have stepped in and nipped it in the bud.

The American govt. didn't and America and the world paid a heavy price for that.

Indian govt. would better take a cue from the American experience and start monitoring and regulating the banks' activities so that any such problem can be precluded in its infancy itself.

The banks especially SBI is said to lose a whole lot of money if KFA closes.

 

[CaptainJackSparrow]

So again its unfair to private players. How do you feel when your competitor even though in as bad shape as you is is repeatedly rescued using public money while you on the otherhand had to account for every single paisa.

Thats why I am for the bailout of KFA..not bcs of the love for Vijay Mallya but bcs I see the whole process being unfair to KFA. The Govt can't disinvest AI..fine but bailout KFA also.

GoI is not running a charity here.

One wrong decision does not mean that you enter a chain reaction of making subsequently wrong decisions one after the other.

---------- Post added at 01:23 AM ---------- Previous post was at 01:22 AM ----------

The banks especially SBI is said a whole lot of money if KFA closes.

I'm sorry, what?

 

[harpoon]

GoI is not running a charity here.

One wrong decision does not mean that you enter a chain reaction of making subsequently wrong decisions one after the other.

Then what you call the 20,000 crores given to AI as its very much sure that they are not going to make a single paisa profit in the coming times.

I'm sorry, what?

Just heard in the news that KFA had taken big loans from SBI.

 

[takeiteasy]

so, will GoI intervene in airline sector... like what USA did with their iconic brand General Motors.
Still fighting over GM's bailout | Money - Home

 

[livingdead]

Then what you call the 20,000 crores given to AI as its very much sure that they are not going to make a single paisa profit in the coming times.



Just heard in the news that KFA had taken big loans from SBI.

Difference between AI and KF:

1. AI is the national airline(flag carrier, most countries have one, it is matter of prestige)
2. It is public service utility, it will happily fly to destinations which is commercially not viable because it has to serve all Indians.
3. In case of emergency, you can expect AI to divert its craft from profit making route( like bringing Indians from troubled places).

I donot like govt to be involved in such capitalistic ventures, govt should not make money, it should run country. It should be refree not player.
Because it will always be inefficient compared to private players.
But if it does(like AI), it needs to support it.(using taxpayer's money)

 

[shiv]

After reading the entire topic this is what I have to say,

1. Mallya is a showoff because he has to, in the liquor business you need to throw lots of parties so as to make profit. This is because direct advertisements is not possible.

2. Mallya has lots of money. Yes. But would he have been allowed to siphon off money from KFA if there were profits, to his accounts ? No. So, mallya can rescue the company, but that will be a pure business call not a responsibility.

3. Air connectivity is crucial to a nation's development. That's why we had airlines in 60's and 70's also when our country's economy was literally hand to mouth much less an emerging economy. Remember, you can always loose money and recover it but a time lost is unrecoverable. Whether a quick connectivity option like airlines should be there in a country is not even debatable to start with.

4. The fact that only indigo is making profit out of scores of airlines is in itself a cause of concern. So, the issue is not deciding on a bailout but how much the current taxation scheme is responsible for the situation ?

IMO, the current taxation scheme is simply not market friendly at all. Due to the murderous taxes, most airlines wants to fly only on heavy traffic routes like Delhi-Mumbai or Delhi-Chennai etc. On the less traffic routes, airlines do not even want to venture out at all. They have no option but to attract more passengers on those select routes, while giving those high taxes, they allow the profit margin to shrink to the bones.

The reason that not many airlines want to fly on so many domestic routes, defeats the whole purpose of opening up the industry to start with.

Also, airline industry is such that the profits are always very very less even when the company is doing really good. This is due to the numerous vulnerabilities that industry faces.

5. In case the taxation schemes is indeed responsible( the fact that almost none are making profit is a reliable indication of it ), then it is guaranteed that it is time before other companies goes to the drain. So, lets say another big fish like Jet files for bankruptcy, will the govt then realize it's folly and decide to arrange cash ? Won't that be a cheating with KFA only because mallya threw more parties than Naresh Goyal ?

6. We all agree that bailout is counter to even ECO101 logic but we just cant allow a large player to simply disappear. Afterall, capitalist economy is more about even competition rather than simply free to decide with govt intervention. In order to ensure fair competition in the market, govt should at least give a helping hand to KFA.

7. Another issue is whether or not a country should protect it's heavyweights in difficult times like global recession ? IMO, the govt. is right in bailing KFA out.

8. Kingfisher airlines is different from Kingfisher Calendar. So they would continue coming up with the calendar.

 

[harpoon]

Difference between AI and KF:

1. AI is the national airline(flag carrier, most countries have one, it is matter of prestige)
2. It is public service utility, it will happily fly to destinations which is commercially not viable because it has to serve all Indians.
3. In case of emergency, you can expect AI to divert its craft from profit making route( like bringing Indians from troubled places).

1.An airline with a combined loss of 10 billion dollars, that needs constant infusion of public money. Thanks..but no thanks I can happily live without this 'prestige'.

2.Thats debatable as I heard private airline companies should also fly some loss making routes in India. Also as a reward for flying in non-profitable routes,Govt lets AI monopolize international routes.Freedom to fly - Indian Express

AI has enjoyed the lone right to the entire seat capacity agreed between India and a second country, called bilaterals. Private carriers were left to pick up the crumbs AI would leave them. However, that doesn’t mean AI did justice to its monopoly. Far from it, 75 per cent of flying rights on profitable routes such as the Middle East remain unutilised. For Dubai, the most profitable route, the figure is 44 per cent. In Europe, only 10 per cent of the capacity is utilised and 95 per cent of the market left to foreign carriers.

3.That happen once in a blue moon and you don't exactly need a national airline to counter the situation. You can lease airplanes or use airforce aircrafts to bring Indians home.

 

[harpoon]

After reading the entire topic this is what I have to say,

1. Mallya is a showoff because he has to, the liquor business needs to throw lots of parties so as to make profit. This is because direct advertisements is not possible.

2. Mallya has lots of money. Yes. But would he have been allowed to siphon off money from KFA if there were profits, to his accounts ? No. So, mallya can rescue the company, but that will be a pure business call not a responsibility.

3. Air connectivity is crucial to a nation's development. That's why we had airlines in 60's and 70's also when our country's economy was literally hand to mouth much less an emerging economy. Remember, you can always loose money and recover it but a time lost is unrecoverable. Whether a quick connectivity option like airlines should be there in a country is not even debatable to start with.

4. The fact that only indigo is making profit out of scores of airlines is in itself a cause of concern. So, the issue is not deciding on a bailout but how much the current taxation scheme is responsible for the situation ?

IMO, the current taxation scheme is simply not market friendly at all. Due to the murderous taxes, most airlines wants to fly only on heavy traffic routes like Delhi-Mumbai or Delhi-Chennai etc. On the less traffic routes, airlines do not even want to venture out at all. They have no option but to attract more passengers on those select routes, while giving those high taxes, they allow the profit margin to shrink to the bones.

The reason that not many airlines want to fly on so many domestic routes, defeats the whole purpose of opening up the industry to start with.

Also, airline industry is such that the profits are always very very less even when the company is doing really good. This is due to the numerous vulnerabilities that industry faces.

5. In case the taxation schemes is indeed responsible( the fact that almost none are making profit is a reliable indication of it ), then it is guaranteed that it is time before other companies goes to the drain. So, lets say another big fish like Jet files for bankruptcy, will the govt then realize it's folly and decide to arrange cash ? Won't that be a cheating with KFA only because mallya threw more parties than Naresh Goyal ?

6. We all agree that bailout is counter to even ECO101 logic but we just cant allow a large player to simply disappear. Afterall, capitalist economy is more about even competition rather than simply free to decide with govt intervention. In order to ensure fair competition in the market, govt should at least give a helping hand to KFA.

7. Another issue is whether or not a country should protect it's heavyweights in difficult times like global recession ? IMO, the govt. is right.

8. Kingfisher airlines is different from Kingfisher Calendar. So they would continue coming up with the calendar.

Civil Aviation is the need for a country as large as India. I read somewhere that infrastructure wise it costs much less to transport people by air than by say HSR..thats why eventhough being a advanced country you will not find HSR in USA. The need of the hour is to make flying cheap and affordable to common masses. Instead of approaching flying as something for elite, the Govt should make civil aviation a national priority.

Recently a person I know visited Delhi with his family. According to him he would have never done that if not for the cheap air fares. Travelling by train was a no-no as it would have taken 4 days from my city to Delhi.

Also nobody it seems is sympathetic KFA bcs of Vijay Mally's flashy lifestyle. Almost every comment in major newspapers ridicule him for his yachts, IPL, F1 and ofcourse his calendar girls. I think it has lot to do with jealousy ? and now happiness at his misfortune.

Vijay Mallya is a show off but he is showing off at the expense of his own wealth. KFA's misfortune has nothing to do with it.

 

[shiv]

Civil Aviation is the need for a country as large as India. I read somewhere that infrastructure wise it costs much less to transport people by air than by say HSR..thats why eventhough being a advanced country you will not find HSR in USA. The need of the hour is to make flying cheap and affordable to common masses. Instead of approaching flying as something for elite, the Govt should make civil aviation a national priority.


Also nobody it seems is sympathetic KFA bcs of Vijay Mally's flashy lifestyle. Almost every comment in major newspapers ridicule him for his yachts, IPL, F1 and ofcourse his calendar girls. I think it has lot to do with jealousy ? and now happiness at his misfortune.

Vijay Mallya is a show off but he is showing off at the expense of his own wealth. KFA's misfortune has nothing to do with it.

This is a hangover left from the socialist days of pre 1991 era. The taxes have been deliberately kept high to keep the first AC compartments in trains a feasible option which was partially inspired by the notion that middle class people should travel in trains.

By using trains a person has to waste his precious 2 days to reach from Cochin to Delhi which he could have covered in a matter of hours provided he is ready to spend a little more.

To provide a bailout is a call of govt. but IMO the murderous tax structure is equally responsible for this debacle as much as the mismanagement of KFA officials.

 

[angeldemon_007]

Why this news is posted in this forum ???