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BW Businessworld

Grounded!

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Flying a budget airline is cheap, but managing one surely isn't. On 27 September, Kingfisher Airlines chairman Vijay Mallya threw in the towel (for the low-cost airline segment) by announcing that Kingfisher Red would no longer fly. As costs — primarily that of aviation fuel — have shot up, and full-service airlines have cut prices, budget airlines have felt the squeeze from both ends.

Media reports in the last few weeks have talked about Kingfisher Airlines' financial troubles; at the shareholders' meeting in Bangalore, Mallya was quick to assure investors that the promoter group — mainly liquor companies United Breweries and United Spirits — had the wherewithal to keep the full-service Kingfisher Airlines operational.

Was shutting down Kingfisher Red a reality check or a smart move? The comparison may seem far-fetched, but in the past two years, more than 20 low-cost airlines have shut down in Europe, the casualties of a price war with big airlines and the high costs of fuel. Sign of coming times?

STRICTLY BUSINESS

The Singapore Grand Prix has turned the clock around. To ensure "zero jetlag", the races were run on a European GP schedule. The F1 crowd could follow European time — go to bed at 6 am and wake up at 2 pm. The hotels too adjusted their clocks.

(This story was published in Businessworld Issue Dated 10-10-2011)