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Kingfisher model is 'inherently flawed': Air Deccan founder

21-Nov-2011 11:38 AM

Air Deccan founder Captain G R Gopinath stated he believes the Kingfisher model is "inherently flawed" (Economic Times/Financial Express, 19-Nov-2011)."In my opinion, the Kingfisher model is inherently flawed – a complete mismatch in the Indian context. It is not just a full service, it's a full service + +. It's Kingfisher First Class, as Vijay Mallya flaunts it," he said. He added Kingfisher Airlines chairman Dr Mallya "failed to realise the worth of Air Deccan". "It had a fantastic network covering 70 cities, of which 25 were monopoly routes," he said, adding "Mallya was never comfortable with the low-cost business model" despite LCCs being the "ones making money even in matured markets across the world".

Air Deccan: "You cannot grow in this segment beyond a point simply because very few people can afford it. Kingfisher looked at the top of the pyramid to grow, but the actual volume – an almost inexhaustible customer pipeline – was at the base of the pyramid. When there is excess capacity at the top end of the customer segment, you end up selling tickets at a discount and fail to expand the consumer base. Brand Kingfisher is very strong and vibrant. It is an excellent product and service offering, and the airline has a massive network it inherited from Air Deccan – almost twice that of Jet Airways. Vijay Mallya is a very smart and shrewd businessman with charisma. His big mistake was to change Air Deccan to Kingfisher Red. He should have kept the two brands separate. There was little difference between Kingfisher Airlines and Kingfisher Red as they looked the same and offered similar service. Mallya tried to make Kingfisher Red sexier, but that led to it becoming neither low-cost nor full-service. It got stuck in the middle," Captain G R Gonpinath, founder. Source: Economic Times, 19-Nov-2011.