Why Kingfisher Airlines' Problems Are Affecting Both Established Airlines And Start-ups?
When the troubles of Kingfisher Airlines first surfaced, it was essentially promoter Vijay Mallya's headache. The seven-year-old airline had not made a profit since inception, but that was the least of the carrier's worries.
Losses began to pile. Soon, employees felt the heat because of unpaid salaries for months. In no time, the carrier's problems consumed passengers, thanks to frequent cancellations, forcing the government to ground the airline in October. By then, the Indian air traveller was already feeling the pinch of soaring fares. Rival airlines exploited the absence of Kingfisher to the hilt — India today has low-cost airlines; it would be preposterous to call them low-fare. Kingfisher had inevitably become Indian aviation's headache.
Deploying more planes by existing airlines or the launch of potential startups would ease the pain. But Indian carriers are woefully short of planes. In an earlier interview, Aditya Ghosh, president of low-cost carrier IndiGo, said: "Few realise that the US has 11,000 commercial planes. We have 440 commercial planes — that is international, domestic, turboprop, big planes and all airlines put together. It is nothing."
The Indian airport authorities have charged the aircraft owners for debts owed to them by Kingfisher and have been able to prevent the rightful owners from removing their aircraft out of India.
---- Tony Griffin, managing director, Phoenix Aircraft Leasing Pte Ltd
A few carriers such as GoAir and IndiGo have placed huge orders — 72 and 180 A320 Airbus aircraft each — but planes do not arrive by bucket loads. The acute shortage is evident in the inability of airlines to fill the arrival and departure slots vacated by Kingfisher. Before its licence was suspended on October 20, 2012, Kingfisher held 400 slots. The airline applied and received 120 slots for the winter schedule from October 30, 2012, to March 30, 2013, post suspension. Even those slots are not being used by rival carriers, according to officials of airlines, airports and aviation ministry.
The Kingfisher crisis has also hit investors looking to launch airlines. Shyson Thomas, promoter of Air Pegasus, was looking to start a regional airline in the south last October. He is still hunting for aircraft. "Globally, airlines want to only operate aircraft; seldom do they buy." Thomas says he has been talking to aircraft lessors in Spain, France, Germany, Denmark, the UK and Singapore for months, but to no avail. "They do not want to lease it to Indian companies."
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