Vijay Mallya can play the victim well. After months of being on the run, post the Kingfisher Airlines fiasco which lead to unpaid salaries of staff, dues to state-run banks and other liabilities, Mallya has once again accused the government of making him a “poster boy of bad loans and financial crime”.
He has also assured shareholders of United Breweries, where he continues as chairman, that he would fight legally to recover assets seized by agencies over unpaid loans taken to run KFA.
There is nothing new in what Mallya has said but it bears repetition simply because what he makes out to be regulatory issues leading to the demise of Kingfisher Airlines remain till date.
Other airlines continue to complain – in vain – about the unusually high-cost environment which suffocates profitability. In India, aviation turbine fuel attracts the highest taxation anywhere in the world and since ATF accounts for up to half of any airline’s operating costs, running an airline in India is anyway an expensive business which needs large investments and generates meager returns.
On top of that, restrictive policies in foreign investments till very recently tied up India’s airlines in a knot since their fund raising and overseas expansion plans were stymied by the government.
So the question that begs answers even now, four years after Kingfisher’s demise, is this : Could a more benign policy and regulatory environment have helped arrest the steep decline of this airline, perhaps prevented its demise?
At a time when anyone and everyone has been cursing banks and their tardiness in preventing Mallya from allegedly sinking up to Rs 9,000 crore of cash in the airline business, it is hard to even think if the government of the day could have done more to help Mallya destroy public wealth.
30/09/16 Sindhu Bhattacharya/F.Business
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He has also assured shareholders of United Breweries, where he continues as chairman, that he would fight legally to recover assets seized by agencies over unpaid loans taken to run KFA.
There is nothing new in what Mallya has said but it bears repetition simply because what he makes out to be regulatory issues leading to the demise of Kingfisher Airlines remain till date.
Other airlines continue to complain – in vain – about the unusually high-cost environment which suffocates profitability. In India, aviation turbine fuel attracts the highest taxation anywhere in the world and since ATF accounts for up to half of any airline’s operating costs, running an airline in India is anyway an expensive business which needs large investments and generates meager returns.
On top of that, restrictive policies in foreign investments till very recently tied up India’s airlines in a knot since their fund raising and overseas expansion plans were stymied by the government.
So the question that begs answers even now, four years after Kingfisher’s demise, is this : Could a more benign policy and regulatory environment have helped arrest the steep decline of this airline, perhaps prevented its demise?
At a time when anyone and everyone has been cursing banks and their tardiness in preventing Mallya from allegedly sinking up to Rs 9,000 crore of cash in the airline business, it is hard to even think if the government of the day could have done more to help Mallya destroy public wealth.
30/09/16 Sindhu Bhattacharya/F.Business
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