Kingfisher Red to fold up in four months

Mumbai: It’s the end of the road for one of India’s most successful budget airlines. Kingfisher Airlines, India’s second-largest airline by market share, has decided to stop its low-fare service — Kingfisher Red (erstwhile Air Deccan) — in the next four months. Air Deccan, which aimed to make flying affordable to the common man, became popular with the RK Laxman common man character and the tagline ‘Simplifly’.
Analysts said the closure of Kingfisher Red service would lead to Kingfisher conceding about 4 per cent of the market share to other low-cost airlines. PwC executive director and aviation analyst Dhiraj Mathur said this would impact the topline of Kingfisher.
“The airline which is facing a debt problem would ultimately have to rely on the lenders’ approval of this change in its business plan,” an aviation industry expert who consultants banks said.
Analysts, however, said it was not clear whether Kingfisher would surrender its leased aircraft to salvage its bottomline.
The loss-making airline was acquired by billionaire industrialist Vijay Mallya in 2007 from captain GR Gopinath in a landmark deal in India’s aviation history.
“At this time Kingfisher will be dropping the Kingfisher Red class of service. This effort will be concluded in the next four months,” Vijay Mallya, chairman at UB group said in a statement on Wednesday.
Kingfisher Airlines at present offers three classes of service-Kingfisher First, Kingfisher Class Economy and Kingfisher Red no frills economy. According to the company, over the past six months, Kingfisher Class has generated higher yields and seat factors than the no frills Kingfisher Red class of service.
28/09/11 Rupesh Subhash Janve/mydigitalfc.com

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Categories: Kingfisher Red Sep 2011, Kingfisher Sep 2011