India Insight

To pity or not to pity Vijay Mallya

August 10, 2012

Picture this – You run an airline that never made a profit, you need to pay off $1.4 billion debt from who-knows-where and airports, taxmen and oil companies are pursuing you to get their money back.

You still believe you can turn the airline around. You still believe you will find a white knight who will buy into your carrier and help it back on its feet. You are giving your best to convince investors that your brand-value is still strong, you can still attract passengers – all you need is some hard cash immediately.

And then, suddenly, your airline is forced to cancel dozens of flights because your pilots want their salaries before you are allowed to run the airline, or even negotiate with investors to save their jobs.

It must be frustrating to be in that position. It must be difficult being Vijay Mallya.

“Why should I spend every day to keep our airline afloat if the actions of our own colleagues lead to loss of guest confidence and lower income by cancellation of flights or low load factors that result from uncertainty?” a frustrated Mallya wrote in a strongly worded letter to employees on Thursday, according to local media. “What is the confidence that I can give to investors who I am in dialogue with?”

His sheer frustration is understandable.

He is so furious that he asked employees to quit if they do not believe in the company – Kingfisher Airlines, a carrier that was Mallya’s prized possession, his status symbol and until recently the perfect reflection of his high-flying five-star image.

It’s hard not to pity the flamboyant liquor baron who has been reduced to a desperate cash-seeker to rescue his airline.

But sympathy fades when you realize that Mallya has been talking for months about potential investors who are waiting to pour in cash, about paying his staff on time, about clearing tax dues and coming out of a bank-accounts-frozen mess, and nothing has happened.

You have to take Mallya’s statements with a pinch of salt when you figure out that all his sweeping statements were made whenever there was trouble – with employees, with regulators or with taxmen.

It is indeed incredible that Mallya is still running an airline that everybody thought was finished long back, and has not lost its “scheduled carrier” status yet.  Mallya deserves credit for pumping in cash to a limping company through its worst times.

But to continue doing that, or to revive the airline, Mallya needs to back his statements with quick concrete actions.

Public sympathy and loyalty, which he desperately needs now, will not last long with a man who talks big, but never keeps his promises.

Talks about his cricket, Formula One and soccer teams or the richest yacht in the world will further harm the iconic businessman’s image.

He has not been able to pay cricketers who play for his Royal Challengers Bangalore team in the lucrative Indian Premier League, and banks are just waiting to seize his assets to recover debt, already hurting his reputation hard – assuming it’s not already beyond repair.

These are not so good times for Vijay Mallya.

 

Comments
3 comments so far | RSS Comments RSS

Sins of liquor trade seem to have come back to haunt Mallya. So many lives ruined by drinks and alcohol which he still sells in plenty must be wreaking karmic havoc. Sad that he has no friends. Now he will understand the term ” a friend in need is a friend indeed “. KFA is going, going….BAM. He can now nurse his drinks.

Posted by kpvidya1999 | Report as abusive
 

most probably his arrogance has brought him to this situation. He did not care for the signs of deterioration of relationship with the airline staff. it is the case with all rich people who think that they can purchase anything and everything on earth forgetting that there are exceptions. Now he is feeling the heat of own deeds.

Posted by karnic | Report as abusive
 

Corporations have often revisited their strategies to adopt to changing dynamics in their core operations.Miss-steps have proved costly, resulting in boardroom reshuffling to chapter11.Ambitious CEO’s often find themselves in the hot seat facing angry investors, frustrated employees and plummeting market share.All this is well when the going is good, but when things turn sour everyone runs for the exit.To pity or not to pity Vijay Mallya clearly suggests things are in dire shape and something has to give.Being Vijay Mallya these days is not sexy,there is heavy turbulence and as he navigates the difficult skies, there is reason to believe that Mr Vijay Mallya can deliver, and a safe landing could be on the horizon.Market pundits will question throwing good money after bad and injecting much needed cash is not easy,until you rebuild confidence because market participants hate uncertainty,a white knight in the form of a private venture investor, is likely especially given the depressed valuation,An outright sale to merge with another airlines cannot be ruled out either,disgruntled employees moral will get a boost if they are offered part ownership through the restructuring process.Convincing creditors and airline analyst community is going to be tough but will buy much needed time and a breather for Mr Mallya.And while things change at KFA as they will invariably be, remember it is always darkest before dawn and and history reminds us that every critically ill patient admitted to the Intensive Care Unit does not land up in the cemetery.

Posted by Wakifbootwala | Report as abusive
 

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