The Hindu Business Line : ‘Kingfisher has game-changing plan for overseas flights’

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Kingfisher may have to fork out $250 m initially.
Will have to invest heavily people.
May find it tough to avoid losses, say analysts.

K. Giriprakash

Bangalore, Dec. 21 Kingfisher Airlines may have to fork out about $250 million initially for its international operations but it is learnt to be working on a new ‘game-changing’ model for its overseas flights.

Sources close to the airline told Business Line that Kingfisher Airlines has a ‘game-changing’ product, which could alter the way international flights operate. The $250 million includes the cost of five A340s and five A330s which the airline will induct into its fleet next year for its international operations.

The UB Group chairman, Mr Vijay Mallya, has already announced that Kingfisher Airlines will fly international routes including the US and Europe while Deccan will fly regional international routes like the South-Asian countries and West Asia excluding Dubai and a few other cities.

Seat positioning

Airline analysts say that the key to the success of international operations of Kingfisher Airlines would be the positioning of the first class as well as business class of the airline. “The key to the game would be how you sell your first class and business class seats. If you can get them right, then you are in the game,” Centre for Asia-Pacific Aviation chief executive officer for the Indian sub-continent and West Asia, Mr Kapil Kaul, said.

Mr Kaul said each first class seat on a US flight equals between eight and 10 economy seats, and a business class seat equals between six and eight economy seats. Hence, the airline will have to launch a product which would set it apart from the rest.

Mr Kaul said it would normally take between 12 months and 18 months for the international operations to break even and Kingfisher will have to invest heavily in people and put together a top notch corporate team.

“Emirates and even Jet is investing top dollars for its first class seats which Kingfisher Airlines has to match,” he pointed out. He said for its international operations, the management should put a cap on A320 flights and cull out some of the capacity to be used for overseas operations.

However, an analyst with an international firm who did not want his name to be quoted said that Kingfisher could in fact find it tough to operate international routes without undergoing huge losses. “I would be very surprised if they can get it right the first time,” he said.

Bigger competition

He said Kingfisher will have to choose the routes carefully while planning its overseas operations. “Once you start flying international routes, you are competing with every airline in the world. Therefore there is competition at every level,” he said.

“The jury is still out on whether Dr Mallya has made the right choice,” an airline the analyst said.

fact find it tough to operate international routes without undergoing huge losses

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