The last couple of weeks almost all the newspapers and websites have published articles about low-cost airline SpiceJet and its buyout by new investors. Troubles for the airline seem to have piled up and it remains financially strapped. I'm sure its current management is trying its best to manage the crisis and I wish them luck. No one - the industry, the government, the flying public, you or me - wants to see another airline go the Kingfisher way.
The way things have developed holds some lessons for promoters and management of airlines - indeed any business - in India, although the string of airlines that have pulled down the shutters in the past - Damania, East West, Modiluft, MDLR, Paramount, NEPC, Kingfisher - should have taught them some already.
First, success in one business does not guarantee success in another. In both Vijay Mallya and Kalanithi Maran's case, they have done well in liquor and television businesses respectively (although both had virtual monopolies) but neither seems to have come to grips with aviation. Even Naresh Goyal, who has no other businesses, suffered the moment real competition came into the sector. What this implies is that it is easy to make money when you are a virtual monopoly; yet success in one sector is not a guarantee for success in another.
03/12/14 Anjuli Bhargava/Business Standard
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The way things have developed holds some lessons for promoters and management of airlines - indeed any business - in India, although the string of airlines that have pulled down the shutters in the past - Damania, East West, Modiluft, MDLR, Paramount, NEPC, Kingfisher - should have taught them some already.
First, success in one business does not guarantee success in another. In both Vijay Mallya and Kalanithi Maran's case, they have done well in liquor and television businesses respectively (although both had virtual monopolies) but neither seems to have come to grips with aviation. Even Naresh Goyal, who has no other businesses, suffered the moment real competition came into the sector. What this implies is that it is easy to make money when you are a virtual monopoly; yet success in one sector is not a guarantee for success in another.
03/12/14 Anjuli Bhargava/Business Standard
