kingfisher in Trouble?
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kingfisher in Trouble?
Read an article yesterday saying that kingfisher will be laying of pilots. Any truth to that? If so what fleet (ATRs, A320s, 330s)? From reading looks like the international pilots will be dropped.
Kingfisher, Jet Airways Drop International Routes | AVIATION WEEK
Kingfisher, Jet Airways Drop International Routes | AVIATION WEEK
Last edited by HurryUp&Retire; 11th Oct 2008 at 16:00.
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yes it is under trouble.
all the new pilots who got the 'letter of intent' but were'nt put on payroll will be given the boot for sure.
rumours have it that those chap with less than 300 hours on type will also have to hang up their caps.
all the new pilots who got the 'letter of intent' but were'nt put on payroll will be given the boot for sure.
rumours have it that those chap with less than 300 hours on type will also have to hang up their caps.
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Folks--all the airlines in India are feeling the heat. Here is an article reprint
on a related topic.
AVIATION
Airlines are bleeding, but a fare hike would alienate passengers
By Kumar Anshuman
On one of his recent flights to Mumbai from New Delhi, Vibhor Kataria, an executive at a private company, asked a flight attendant for a specific magazine. She politely replied that they were not carrying the magazine anymore. Kataria was surprised. "I used to get this magazine on flight. That's why I didn't carry it from home." Magazines, in fact, are only one of the many things the air passengers have been denied thanks to the rising Air Turbine Fuel (ATF) prices that leave airlines bleeding.
The cost of ATF, or refined kerosene, tripled in the past four years and rose over 65 per cent in the last five months. "ATF price now accounts for 61 per cent of the total operating cost. The airlines are compelled to increase the fare," says Jitendra Bhargava, director, public relations, National Airlines Company Limited, an entity formed after the merger of Indian Airlines and Air India. "It's a paradoxical situation, where everybody involved in the airline industry is making money barring airline companies." Obviously, the dig is at governments, airports and travel agencies. When the civil aviation ministry asked the state governments to reduce sales tax on ATF, few of them responded. "These state bodies don't realise that if the number of flights to that state gets reduced, their revenue will also be less," says Bhargava.
Having recently raised fares, the airline companies are adopting cost-cutting measures. Besides withdrawing flights from loss-making routes, they are reducing load on board. The lighter the aircraft the less the fuel consumption. "We have withdrawn 20-odd services from different routes from July 1," says Bhargava. Apart from this, Air India will cancel the 5 per cent commission paid to travel agencies and portals from October. "By doing this Air India will save more than Rs 600 crore," he says. Air India will reduce the number of magazines and newspapers on board and "focus more on visual entertainment via screens attached to the seats," says Bhargava.
Jet Airways suffered a loss of Rs 221 crore for the quarter ended in March, against a profit of Rs 88 crore for the same period last year. The total loss for the fiscal year 2007-08 was Rs 654 crore, including that of the low-cost subsidiary, JetLite. Jet plans to withdraw from 25 routes and has other cost-cutting measures also on the cards. "But how much we are able to improve will really depend on ATF prices, which show no signs of relaxing," says a company official.
Kingfisher Airlines is planning to import ATF and thus save at least Rs 600 crore. Another plan is to wash the aircraft often, as to remove dust on the outer panel which increases the weight, and carry only half tank or less water on the aircraft.
SpiceJet cancelled 21 flights, and stopped offering cookies and candy, which saves Rs 1 crore a month. The company has declared a moratorium on new recruitment. "We are not going to renew the contracts with our staff from foreign countries," says an official. SpiceJet suffered a loss of Rs 133 crore in 2007-08. The company projected a cash inflow of Rs 140 crore in June, out of which Rs 110 crore was spent on ATF and Rs 19-23 crore on lease. It left it with Rs 8 crore to run the company, when the operating cost per day hovers around Rs 4.6 crore.
Is a fare hike imminent? A dip in the number of passengers is the last thing airlines want at the moment. In fact, it is already showing a decline thanks to a rampaging inflation. The 28 per cent domestic passenger growth registered in the last quarter of 2006-07 came down to 11 per cent in 2007-08. Take the case of Ram Singh, a frequent flier on the Mumbai-Varanasi route. He usually takes SpiceJet's Mumbai-New Delhi-Varanasi flight. For his recent flight to Varanasi, he had to pay Rs 600 more than he used to. "But they claimed that they hadn't increased the fare. And they didn't even offer me a candy on board," he says. On his return journey, with his wife and daughter, he travelled first class AC in a superfast train. "Though it took me 27 hours to reach Mumbai, the journey was very comfortable. Also, it cost only Rs 2,800 a passenger compared to Rs 6,153 of SpiceJet," says Singh.
Indigo, Go Air and Paramount have yet to have a proper strategy to combat the ATF price hike. But they are busy doing their homework to figure out the exact damage and counter policies. "We haven't decided on anything and we can't say what will happen next," says C.R. Kannan, assistant vice-president, Paramount Airways. Interestingly, MDLR Airlines, a low-cost regional player, is going ahead with its expansion plans and is all set to add some new Airbuses to its fleet. "We will fly the Airbuses on the non-hilly areas like Pune, Jabalpur and Indore," says Gopal Goyal, chairman, MDLR.
Ajay Jasra, an aviation expert, recommends a three-tier system, like the one in European countries, to cushion the blow. "There should be three categories of airlines-full service, low-cost and regional," he says. "The full service should fly on main routes, the low-cost on main routes but via a regional destination, like Delhi-Ahmedabad-Mumbai, and the regional players should strictly fly on the regional routes like Delhi-Shimla." According to Jasra, the airline companies should sit together and take a decision beneficial for all of them. "Giving way to each other and reducing competition will only let them survive," he says.
Many fear a repeat of the 1996 collapse, in which many private carriers, including the then industry leaders ModiLuft and East West, crashed. But that is just a distant possibility and now the industry is better equipped to deal with the situation. All the same, the sky is not as clear as it was, nor the flight as smooth.
on a related topic.
AVIATION
Airlines are bleeding, but a fare hike would alienate passengers
By Kumar Anshuman
On one of his recent flights to Mumbai from New Delhi, Vibhor Kataria, an executive at a private company, asked a flight attendant for a specific magazine. She politely replied that they were not carrying the magazine anymore. Kataria was surprised. "I used to get this magazine on flight. That's why I didn't carry it from home." Magazines, in fact, are only one of the many things the air passengers have been denied thanks to the rising Air Turbine Fuel (ATF) prices that leave airlines bleeding.
The cost of ATF, or refined kerosene, tripled in the past four years and rose over 65 per cent in the last five months. "ATF price now accounts for 61 per cent of the total operating cost. The airlines are compelled to increase the fare," says Jitendra Bhargava, director, public relations, National Airlines Company Limited, an entity formed after the merger of Indian Airlines and Air India. "It's a paradoxical situation, where everybody involved in the airline industry is making money barring airline companies." Obviously, the dig is at governments, airports and travel agencies. When the civil aviation ministry asked the state governments to reduce sales tax on ATF, few of them responded. "These state bodies don't realise that if the number of flights to that state gets reduced, their revenue will also be less," says Bhargava.
Having recently raised fares, the airline companies are adopting cost-cutting measures. Besides withdrawing flights from loss-making routes, they are reducing load on board. The lighter the aircraft the less the fuel consumption. "We have withdrawn 20-odd services from different routes from July 1," says Bhargava. Apart from this, Air India will cancel the 5 per cent commission paid to travel agencies and portals from October. "By doing this Air India will save more than Rs 600 crore," he says. Air India will reduce the number of magazines and newspapers on board and "focus more on visual entertainment via screens attached to the seats," says Bhargava.
Jet Airways suffered a loss of Rs 221 crore for the quarter ended in March, against a profit of Rs 88 crore for the same period last year. The total loss for the fiscal year 2007-08 was Rs 654 crore, including that of the low-cost subsidiary, JetLite. Jet plans to withdraw from 25 routes and has other cost-cutting measures also on the cards. "But how much we are able to improve will really depend on ATF prices, which show no signs of relaxing," says a company official.
Kingfisher Airlines is planning to import ATF and thus save at least Rs 600 crore. Another plan is to wash the aircraft often, as to remove dust on the outer panel which increases the weight, and carry only half tank or less water on the aircraft.
SpiceJet cancelled 21 flights, and stopped offering cookies and candy, which saves Rs 1 crore a month. The company has declared a moratorium on new recruitment. "We are not going to renew the contracts with our staff from foreign countries," says an official. SpiceJet suffered a loss of Rs 133 crore in 2007-08. The company projected a cash inflow of Rs 140 crore in June, out of which Rs 110 crore was spent on ATF and Rs 19-23 crore on lease. It left it with Rs 8 crore to run the company, when the operating cost per day hovers around Rs 4.6 crore.
Is a fare hike imminent? A dip in the number of passengers is the last thing airlines want at the moment. In fact, it is already showing a decline thanks to a rampaging inflation. The 28 per cent domestic passenger growth registered in the last quarter of 2006-07 came down to 11 per cent in 2007-08. Take the case of Ram Singh, a frequent flier on the Mumbai-Varanasi route. He usually takes SpiceJet's Mumbai-New Delhi-Varanasi flight. For his recent flight to Varanasi, he had to pay Rs 600 more than he used to. "But they claimed that they hadn't increased the fare. And they didn't even offer me a candy on board," he says. On his return journey, with his wife and daughter, he travelled first class AC in a superfast train. "Though it took me 27 hours to reach Mumbai, the journey was very comfortable. Also, it cost only Rs 2,800 a passenger compared to Rs 6,153 of SpiceJet," says Singh.
Indigo, Go Air and Paramount have yet to have a proper strategy to combat the ATF price hike. But they are busy doing their homework to figure out the exact damage and counter policies. "We haven't decided on anything and we can't say what will happen next," says C.R. Kannan, assistant vice-president, Paramount Airways. Interestingly, MDLR Airlines, a low-cost regional player, is going ahead with its expansion plans and is all set to add some new Airbuses to its fleet. "We will fly the Airbuses on the non-hilly areas like Pune, Jabalpur and Indore," says Gopal Goyal, chairman, MDLR.
Ajay Jasra, an aviation expert, recommends a three-tier system, like the one in European countries, to cushion the blow. "There should be three categories of airlines-full service, low-cost and regional," he says. "The full service should fly on main routes, the low-cost on main routes but via a regional destination, like Delhi-Ahmedabad-Mumbai, and the regional players should strictly fly on the regional routes like Delhi-Shimla." According to Jasra, the airline companies should sit together and take a decision beneficial for all of them. "Giving way to each other and reducing competition will only let them survive," he says.
Many fear a repeat of the 1996 collapse, in which many private carriers, including the then industry leaders ModiLuft and East West, crashed. But that is just a distant possibility and now the industry is better equipped to deal with the situation. All the same, the sky is not as clear as it was, nor the flight as smooth.
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With oil now down to $77, wouldn't Indian carriers start benefitting from this?
Here in the US, 3 months ago Gulf Coast Jet fuel was $170/ barrel. Yesterday it closed below $100. That is a HUGE cost savings for my airline.
Here in the US, 3 months ago Gulf Coast Jet fuel was $170/ barrel. Yesterday it closed below $100. That is a HUGE cost savings for my airline.
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Big trouble it seems!
Kingfisher, Jet Airways Drop International Routes | AVIATION WEEK
Kingfisher's dues with AAI at Rs 200 cr
google
Kingfisher, Jet Airways Drop International Routes | AVIATION WEEK
Kingfisher's dues with AAI at Rs 200 cr
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ATF prices have dropped but fares have not. Passenger bookings have suffered significantly and load factors are dismal for most airlines on many routes. Added to that is the U.S. economy meltdown that will have a ripple effect. The dollar is almost 49 to 1 INR and that is not helping the airlines who are paying many of their bills in USD. My guess is that the next 6-12 months is a critical "make it or break it" for some of the airlines here in India.
While some of the Indian financiers may have deep pocket, they are losing
big time, first at the airline and then also in the market. They are going to have to put their egos in check and put the brakes on. So many of the airlines owe so much money in "back dues" that even with a few profitbale qtrs they may still not break even for quite a while.
I know first hand of people here in India starting to pull their money out of private banks because of fear that they may lose their capital. Many are shifting the money to nationalized banks because they are viewed as safer.
To the best of my knowledge there is no FDIC (insurance for upto USD 100,000) here in India.
While some of the Indian financiers may have deep pocket, they are losing
big time, first at the airline and then also in the market. They are going to have to put their egos in check and put the brakes on. So many of the airlines owe so much money in "back dues" that even with a few profitbale qtrs they may still not break even for quite a while.
I know first hand of people here in India starting to pull their money out of private banks because of fear that they may lose their capital. Many are shifting the money to nationalized banks because they are viewed as safer.
To the best of my knowledge there is no FDIC (insurance for upto USD 100,000) here in India.
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With oil now down to $77, wouldn't Indian carriers start benefitting from this?
The general consensus here in India was that Goyal and Mallya were multi-billionaires who could and would pump money into their carriers indefinitely. Indeed, many thought that Kingfisher was being carried as a cost of ADVERTISING for the rest of the company.
The truth? Both of these men are good businessmen (thats how they got rich, y'all!) who won't accept red ink indefinitely and will do what's necessary to stop the bleeding. Just pray they make the right decisions!
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I know first hand of people here in India starting to pull their money out of private banks because of fear that they may lose their capital. Many are shifting the money to nationalized banks because they are viewed as safer.
Interesting. Disclosure rules here are such that it's difficult to tell how much exposure these private banks have to the "junk mortgage securities" that are giving the rest of the world fits. I hope it's small. We won't know until (if and when) some of these private concerns start disappearing. I doubt the state-owned banks took the bait - they really didn't need to show a high rate of return, hence they had less reason to be tempted. Fewer banks will mean tighter credit - I don't see the Indian government pumping 700 million dollars into the system to prop up private concerns. Hopefully most banks here saw what time bombs these securities were and stayed away. If not, hang on tight!
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If fares are still too high, which were obviously set when oil was $147/ barrel, the will surely lower them to stimulate demand once again. I would think they will do everything possible to stimulate demand before parking jets. I surmise oil will settle in comfortable between $50-$70 a barrel.
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if you think oil will "settle" in that range for any length of time, I have a bridge to sell you in NYC.....back to $150 a barrel (imo) in less than 18 months - I hope I'm wrong
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oil cartel does not like oil price below 100$
OPEC has tasted money at 147$,
...................................................
Rumour circulating that the Kingfisher A380's may never eventuate
............................................................ ...........................
its getting modified with sails under the wing.
reduced weight of engines and fuel tanks will give 380 longer range.
OPEC has tasted money at 147$,
...................................................
Rumour circulating that the Kingfisher A380's may never eventuate
............................................................ ...........................
its getting modified with sails under the wing.
reduced weight of engines and fuel tanks will give 380 longer range.
Last edited by getsetgo; 13th Oct 2008 at 10:38. Reason: add
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No way oil goes back to $147. No way. You have to understand economics to get that. The cartel was warned that their greed would bring about a collapse in price. Well, that has happened. No matter how much they cut, oil won't be going up.
Remember, they can only cut so much. OPEC countries NEED the revenue. In fact, over the past 3 years the easy money from oil is like a drug to them. They can cut back but only 10% or so. Beyond that they will need to cut social programs and park some of their private jets, which they won't do.
Hindsight is always 20/20 but in this case it turns out oil was indeed in a bubble as so many analysts predicted (I did not, I thought it was going to $180, I was wrong too).
Further to all this, the Saudis are scared stiff that, under Obama, US Congress will will pass a myriad of legislation to give massive tax breaks for the pursuit of alternative fuels. Accordingly, they are pleading with other OPEC members to be content with prices at $70-$80/ barrel (in hopes Congress will get their eye off the ball and forget to address alternative energy).
Even at $50-$60, all OPEC members will still make plenty of money. They know this so they will only accept so much of a cut and will continue to pump from their wells no matter the price. Also remember, a lot of the price moves above $90 was due to speculators. They have now all but abandoned oil as a trading vehicle and are moving on to other strategies. Without the speculators, oil will have a hard time getting past $105.
Of course, now that I've said it, oil will probably go back up to $150... I seem to be wrong in a lot of my investment choices of late.
Remember, they can only cut so much. OPEC countries NEED the revenue. In fact, over the past 3 years the easy money from oil is like a drug to them. They can cut back but only 10% or so. Beyond that they will need to cut social programs and park some of their private jets, which they won't do.
Hindsight is always 20/20 but in this case it turns out oil was indeed in a bubble as so many analysts predicted (I did not, I thought it was going to $180, I was wrong too).
Further to all this, the Saudis are scared stiff that, under Obama, US Congress will will pass a myriad of legislation to give massive tax breaks for the pursuit of alternative fuels. Accordingly, they are pleading with other OPEC members to be content with prices at $70-$80/ barrel (in hopes Congress will get their eye off the ball and forget to address alternative energy).
Even at $50-$60, all OPEC members will still make plenty of money. They know this so they will only accept so much of a cut and will continue to pump from their wells no matter the price. Also remember, a lot of the price moves above $90 was due to speculators. They have now all but abandoned oil as a trading vehicle and are moving on to other strategies. Without the speculators, oil will have a hard time getting past $105.
Of course, now that I've said it, oil will probably go back up to $150... I seem to be wrong in a lot of my investment choices of late.
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No way oil goes back to $147. No way. You have to understand economics to get that.
I'm not saying it WILL happen; I can't predict the future. But it sure as hell CAN happen.
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HurryUp&Retire
intresting ID
you knw kingfisher CEO runs young horses for horse racing
just one race these horses run and go to the grape yard for feed.
intresting ID
you knw kingfisher CEO runs young horses for horse racing
just one race these horses run and go to the grape yard for feed.
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kk pilot,
if you think oil will "settle" in that range for any length of time, I have a bridge to sell you in NYC.....back to $150 a barrel (imo) in less than 18 months - I hope I'm wrong
i have been looking at your bridge from my petrol pump.
had plans to buy it soon ,but the petrol price is down now,
i made good money when it was at 147$
to buy your bridge i need more time or higher oil price.
why i want to buy your bridge?
i took some samples of bush
from under the bridge and tested them in my lab.
roots indicate oil.
and no drilling required, i can just syphon it out to my petrol pump storage tank.
i assure you free & unintruppted supply all your life.
so i order OPEC to keep up the price till my targets are meet.
............................................................ ....................
kingfisher is making losses in aviation but not in distillerry.
and aviation unit was always in trouble.....its not happenned now.
there is a saying in hindi,
(gaon bassa naheen lootere pahle aa gaye.)
even before kingfisher started robbers were ready camping.
if you think oil will "settle" in that range for any length of time, I have a bridge to sell you in NYC.....back to $150 a barrel (imo) in less than 18 months - I hope I'm wrong
i have been looking at your bridge from my petrol pump.
had plans to buy it soon ,but the petrol price is down now,
i made good money when it was at 147$
to buy your bridge i need more time or higher oil price.
why i want to buy your bridge?
i took some samples of bush
from under the bridge and tested them in my lab.
roots indicate oil.
and no drilling required, i can just syphon it out to my petrol pump storage tank.
i assure you free & unintruppted supply all your life.
so i order OPEC to keep up the price till my targets are meet.
............................................................ ....................
kingfisher is making losses in aviation but not in distillerry.
and aviation unit was always in trouble.....its not happenned now.
there is a saying in hindi,
(gaon bassa naheen lootere pahle aa gaye.)
even before kingfisher started robbers were ready camping.
Last edited by getsetgo; 13th Oct 2008 at 19:34. Reason: add
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As you now know Jet & KF have formed an alliance. While they might be unlikely partners, the principals involved did in fact put their egos in check and saw the writing on the wall. It should turn out to be a win-win for the two carriers but a lot of uncertainty for other money losing carriers. As this KF/9W deal in not a merger, the monopoly issue may be circumvented by simply touting this as purely a codeshare agreement. The reality will be quite different as they will begin to control fares and the majority of the market.
So where does that leave the other carriers? The stronger ones perhaps(Indigo) can stand-alone but the others will have to consolidate or have some other plan of action. Hopefully for the pilots at KF/9W the staffing levels will remain intact.
So where does that leave the other carriers? The stronger ones perhaps(Indigo) can stand-alone but the others will have to consolidate or have some other plan of action. Hopefully for the pilots at KF/9W the staffing levels will remain intact.