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Friday, 21 April 2017

A painful journey ahead from the cabin to the courts

On the run: Mallya, whose now-defunct Kingfisher Airlines owes more than Rs9,000 crore to various banks in India, made headlines on Tuesday after he was arrested by Scotland Yard on an extradition warrant by India.

On the run: Mallya, whose now-defunct Kingfisher Airlines owes more than Rs9,000 crore to various banks in India, made headlines on Tuesday after he was arrested by Scotland Yard on an extradition warrant by India.

UNITED Airlines CEO Oscar Munoz will soon have to battle it out in court over a lawsuit filed against the airline after it forcibly dragged a passenger out of its plane, and while the airline remains a subject of ridicule on social media, a flamboyant tycoon has joined the party.

Known as the “king of good times”, 61-year-old liquor baron Vijay Mallya, whose now-defunct Kingfisher Airlines owes more than Rs9,000 crore to various banks in India, made headlines on Tuesday after he was arrested by Scotland Yard on an extradition warrant by India.

Hours later, he was freed on a bail bond worth £650,000, although he still has to show up at Westminster Magistrates’ Court on May 17.

On March 2 last year, he made a quiet exit out of India using a commercial flight instead of his two private jets at a time when the Indian banks were raising alarm bells of default.

Now, the Indian Government is bent on getting him back. They have since revoked his Indian passport, but he has repeatedly dismissed all charges against him.

Mallya, known for his lavish lifestyle, inherited UB Spirits from his father. He turned it around into India’s biggest spirits maker and the Kingfisher beer is among the highest-selling brands across the world. He is said to be no longer in control.

This is a man with big dreams and ideas, and in 2005, he started Kingfisher Airlines. He had grand plans to turn it into India’s biggest airline and wanted to gift it to his son. He was said to have personally interviewed the crew to make sure there were no mistakes in hiring or no stripping.

Kingfisher Airlines in its heyday was a superb premium airline that offered fares just above budget airlines.

It was supposed to make its debut at the KL International Airport in late 2010, but never reached its destination.

Now defunct, the airline had to cut its fleet to 28 planes from 66 due to a cash crunch. Mallya tried to save the airline by getting foreign parties to invest, but to no avail.

Running an airline is no mean feat, as we have seen how many times Malaysia Airlines has had to be rescued here.

Whether India will manage to get Mallya extradited remains to be seen, as it is a long process, but he will continue to hog the headlines in India and over social media. As it is, there are plenty of jokes, memes and even parodies for light entertainment.

On the other side of the world, United Airlines’ Munoz is trying hard to undo the damage caused by the airline for its inhumane treatment of a passenger. As CEO, he is worried about bookings and its stock price.

To recap, on Sunday, April 9, a United Airlines passenger, Dr David Dao, was dragged out from an overbooked flight to make way for its own crew to have the seat. Fellow passengers recorded a video that has since gone viral showing security officers forcibly removing the passenger from his seat and dragging him down the aisle by his wrists. It wasn’t until two days later that Munoz issued a full apology.

Reports have said the video has been viewed more than 200 million times and many in China are calling for a boycott of United Airlines. The airline controls about 20% of total United States-China traffic. It is a huge number while its rivals such as Delta Air Lines and American Airlines only hold an 8% share each.

Obviously, Munoz does not want to see a drop in market share, and to make amends, met up with Chinese consulate officials in Chicago this week. Dao is going to see him in court soon.

It is going to be one costly and painful affair for both Munoz and Mallya, and as the drama unfolds, there will be plenty of excitement on social media.

In the meantime, United Airlines has begun dropping fares to woo travellers, which is a common trick airlines use when in crisis mode.

Tags / Keywords: Airlines , Stocks , Earnings , kingfisher

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