Can Seabury fly Kingfisher out of the turbulence zone?

The fact that two of the listed airline firms — budget carrier SpiceJet Ltd and Jet Airways — reported net profits in the December quarter even as his firm widened its loss during the same period has rattled owner of Kingfisher Airlines Vijay Mallya enough to rope in US consultancy firm Seabury Aviation and Aerospace to chalk out its flight path to profitability.
How much of a difference will the advisory firm make to the airline and what remedies should it look at to fly to profit?
Kapil Kaul, CEO, South Asia at Centre of Asia Pacific Aviation (CAPA), said the consultants would have to take a different path to profit for Kingfisher, which is buried in huge debts.
Another industry expert said the airline should continue with its capacity rationalisation and fleet optimisation. “The airline has been reducing its fleet size, which now stands at 66, as compared to the 68 until December,” he said.
Aviation analysts said the airline should utilise this opportunity to hive off some of its services into different business units to boost revenues. Recently, the airline introduced its cargo services on board its aircraft — Kingfisher Xpress — to help it drive up its revenues. Some analysts are, however, sceptical about Mallya’s initiative. They said while the idea seems to be a rather “effective one”, they doubt whether it can succeed.
08/02/10 Ramiya Bhas/Daily News & Analysis

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Categories: Foreign Feb 2010, Kingfisher Feb 2010