- Vijay Mallya was the son of Vittal Mallya and his 2nd wife Lalitha Mallya.
- After his father's death, Vijay Mallya becomes UB group chairman at 25, which was around 19,000 crore in 1983.
- In 2003 , he introduced Kingfisher airlines and in 2005 one flight was taken by Kingfisher airlines.
Good Fleet of service, good air hostesses,top class furnishings.
- He used to take interviews of air hostesses by himself. He had Flambyont image.
- Here are the few points due to which Kingfisher airlines went into problems:
- Kingfisher airlines is the mismangement which turned into scam.
- It was running in all the non-profitable routes.I think there was some ego , where they thought, where no one will go , Kingfisher will go.
- There was no sustainable business model.Regularly asking for bail out packages.
- If we compare Indigo business model and Kingfisher Business model, Indigo has same fleet for all the people, while Kingfisher keeps on switching between Low cost fleet or Premium fleet. This was the reason, there was no standardization in Kingfisher airlines and ease of operation was bad.
- He never use to go to Rajya Sabha nor to his company. He was busy mostly in parties.
2. Mistake of Acquisition and expansion.
- Acquisition of Deccan and expansion Internationally was the big MISTAKE. It was already in loss and instead of making corrections in business model, it started acquiring and expansion, resulted in further loss.
- Kingfisher Red (Deccan) vs Kingfisher Airlines : Both confused people due to same name of deccan and kingfisher. As a result , there was competition between the two airlines and people switched to other airlines.
- As we all know, Expansion without gross margin is comitting suicide.This is the reason of failure for all the startups. They keep on investing and expanding , without thinking of their margin.
3. Fast Cash and low Profit:
And when , 2008 recession came, economic slowdown resulted in downfall of airline industries and as already Kingfisher airlines was in loss, it started losing its customers .Fuel prices hiked and Vijay Mallya was unable to pay the loans and salaries of employees.
These are the few reasons which resulted in the downfall of Kingfisher Airlines and hence Vijay Mallya.
Source : क्यों डूबी Kingfisher Airlines Case Study by Dr Vivek Bindra