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Old 20-02-12   #1
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The Kingfisher Tamasha and Collapse of Aviation Industry in India



I was just reading this excellent article on Firstpost : How Kingfisher flew high on taxpayer money which explains how Kingfisher blew up loads of public money and it stuck me that the whole of the Aviation industry from loss making airports, Indian airlines to loss making private airlines have been living off public money.

I think its high time the civil society objects to this rich mans mode of transport. If the whole sector is in such deep trouble then there is something fundamentally wrong with this sector. There was no need for building such swanky glass airports. The workers in the aviation sector are paid far too much for such a burden on the economy. It is becoming increasingly obvious that the fares are being kept artificially low due to competition. These low fares are loss making and cannot be sustained. If prices are increased to profitable levels then fare prices will rise substantially and very few people will be able to afford this means of transport.

I think it is high time that the government focuses on railroads instead of promoting airlines. Rail is the cheapest means of transport and can be quite profitable. Air travel typically costs 10 times more than rail along with a lot of pollution as well.

There is also a huge shortage in rail capacity. Nowadays passengers have to book tickets months in advance to ensure that they get tickets and this is not possible for everyone. More money needs to be spent of better, high speed trains and rail infrastructure. I hope the government and public sector banks stop throwing money down the drain by subsidising the aviation industry s losses.

Let us know your thoughts on this.


High speed trains from China could be a affordable and profitable means of transport.

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Old 20-02-12   #2
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Rail transport(the kind of you are talking about at least) is not cheaper than flights, outside India. If you take a Eurostar Train from London to paris, it will cost you more than a flight!
Expedia flights - book discount airline flight reservation online
Eurostar : Tickets, Bookings, Timetables, fares and offers
I don't know if that search will work for you or not.
Though I would agree on some points, ie, fares are abnormally low. But hey! they should and can be if proper COST CONTROL is there. There! I said it. That's the "kachar ka beej" (the root of all the problems ) There is no Cost Control, overspending on Air Hostesses salary and to pilots etc.
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

i was typing out a big answer,but after reading the article the mistake lies with the share holders in UB group and the banks which bought the shares at the inflated prices....

The Aviation Industry is not going to collapse over one airline failing Vijay...

Damania, East West, Modiluft... So many airlines came, and that too at the beginning stages of commercial aviation in India.

If KFA goes, there are many airlines waiting to take its place.

Indigo just received their 50th aircraft, and has consistently been in profits. Its also how you run and manage your company.

The Aviation Industry is here to stay.. not go out... relax..

What they need to concentrate on is Air India. Overweight, under utilized and sucking tax payer's money.
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Old 20-02-12   #4
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by Pernicious View Post
Rail transport(the kind of you are talking about at least) is not cheaper than flights, outside India. If you take a Eurostar Train from London to paris, it will cost you more than a flight!
You are giving a very wrong example. Eurostar is expensive because of the undersea Channel Tunnel which was very expensive to construct and is very expensive to maintain too. Surface train is always cheaper. For instance the the Qinghai–Xizang railway (from mainland china to Tibet) was very difficult to construct because of the terrain but is still cheaper than far flight.

We dont have to make any tunnels under the sea or even have maglev trains. Plain high speed trains with better comfort and safety can offer a excellent solution to India's transportation needs.
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Old 20-02-12   #5
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

While it is widely accepted that the turbine fuel costs in India are one of the highest in the world due to government wanting to eat all the taxes on it, it still gives no reason for airlines to take that as an excuse as Indigo has set the Golden Standard of how to run an Airline. They provide one of the best services at the most competetive rates and still manage to make a profit!
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Old 20-02-12   #6
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by JD666 ♥ View Post
The Aviation Industry is not going to collapse over one airline failing Vijay...
It is not just one airline. Air India (AI), Jet group, Kingfisher , SpiceJet and GoAir are all in losses and have accumulated losses of Rs 1.18 lakh crore as on September 30, 2011. See here Govt mulls airline package - The Times of India Besides this the shiny glass airports are also in losses.

And the Indian Public sector banks/Govt are supposed to bail these white elephants out. BTW even the Railways import fuel, they also pay taxes and run trains on all the most unprofitable routes (where the airlines will never go) throughout the length and breath of the country. There is a lot of inefficiency, wastage and corruption there too but they dont transport so few people and accumulate losses like this. It's a different matter that they dont have calenders with pretty girls.
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Old 20-02-12   #7
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

thats coz the government dint allow for expansion and simultaneously came in with the open skies policy allowing foreign airlines to fly easily in and out of the country.

China for example has a very clear policy which restricts the number of flights allowed to foreign carriers. Here in India most of the airlines from the middle east carry so much traffic, that could have easily been given to Indian airline operators.

Not allowing foreign investment also created a financial crisis.

Developing airports that tax the airlines even more. That is a mistake. Air Asia, one of the best low cost carriers stopped its operations to Delhi because the airport fees and other charges were too high.

The system needs attention.. The private carriers have still full intention of operating..

And besides, no matter how cheap and fast you make trian travel, you are still gonna have people wanting and paying for flights.
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Old 20-02-12   #8
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by Virus.exe View Post
Indigo has set the Golden Standard of how to run an Airline. They provide one of the best services at the most competetive rates and still manage to make a profit!
Yes apparently this is the only Airline in India making a profit and not seeking a bailout ... however some of their profit results from sale and leaseback of aircraft, rather than from operations. (they bought aircraft when it was cheap and sell it when the price is high).

But it is commendable that they have made profits three years in a row. Kingfisher is making losses 7 years in a row .. even worse than Indian airlines .. hahaha.
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Old 20-02-12   #9
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by JD666 View Post
Developing airports that tax the airlines even more. That is a mistake. Air Asia, one of the best low cost carriers stopped its operations to Delhi because the airport fees and other charges were too high.
That is true, and people should have thought about this when private investment/operations was allowed in Airports. That too we didnt need such swanky airports. I was stunned when I first saw the interiors of the Delhi and Hyderabad airports. Now GMR says it is having huge losses and is asking for a bailout.

Originally Posted by JD666 View Post
And besides, no matter how cheap and fast you make trian travel, you are still gonna have people wanting and paying for flights.
That is true, but the airlines are serving a very minuscule portion of the population and why should the non-flyers subsidise it ? If the airlines are in losses then let them charge the flyers more .. in which case volumes will shrink. I wonder how many people will still be flying if the ticket prices are doubled.

Rail is a cheap, mass means of transport. We must get a lot more better trains.
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Old 20-02-12   #10
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

if you took everything in to account, air travel is cheaper for people traveling for work.
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Old 20-02-12   #11
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by vijayninel View Post
For instance the the Qinghai–Xizang railway (from mainland china to Tibet) was very difficult to construct because of the terrain but is still cheaper than far flight.
loved that documentray on NGC.... we suck b@!!s compared to the innovation they had to use to build that line
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Old 20-02-12   #12
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Originally Posted by mrnikhilsudo View Post
loved that documentray on NGC.... we suck b@!!s compared to the innovation they had to use to build that line
Yes that documentary was really nice. My favorite was the part of the heatpipes that they used so the ice under the tracks does not melt. The good news is that the Chinese are ready to share the technology with us and there is talk of extending the Qinghai–Xizang railway from Tibet to India. Then we can have direct trains from India to China. This will be useful not just for passengers but also for freight.

Unfortunately due to the shortage of train tickets in India many people are forced to take buses even for longer travels these days. However a streamlined railways will not just be much more cheaper, faster and comfortable but be relatively environmentally friendly too.
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Old 20-02-12   #13
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Well sadly we cant take a step backward... If the railways want to give a fight to the airline industry, they must first upgrade the archaic rail network and the hundreds of bridges that have been standing since the British Raj. So that their rail systems can be upgraded to handle the high speed traffic that will eventually run on em..

Which would again require thousands of crores, again in tax payers money.

The Aviation Industry infrastructure has gotten there first anyhow.

Indigo booked 100 A320s when it was launched. Prices dont change, booking and delivery times do. KFA made some money on selling the delivery slots that they had for their aircrafts to other companies.

Indigo leases out the oldest aircraft in its fleet, as soon as it acquires a new one, and they are backed by Interglobe, a company that handles ticketing, logistics, ground support and what not for airlines worldwide. That experience was bound to pay off. Keeping a fresh fleet allows lower maintenance costs and lesser ground time.

Go Air realised this the hard way when they leased old aircrafts, now they are flying a new fleet as well.


Fuel price is a major chunk of expenditure for airlines, but so is manpower, expecially the upper management which would be like 10% of the total headcount and account for over 35% of the salary expenses.

A slim and trim operation system is the way to go for most of these airlines, but then when slimming has to be done, everyone looks downward, not upward..
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

The O.P is full of nonsense.

The aviation sector isn't going to collapse based on KFA's fortunes.

The railways are not profitable, and it would be absurd to expect them to absorb the volumes of passengers that would be generated if air travel was to be drastically cut back. The INR's Achilles' Heel (bureaucracy) is precisely what is private aviation's greatest asset (lack thereof).

I would type a long-ass post to substantiate both points but given how quickly discussions get sidetracked around here, I'm not going to waste my time except to say - do more reading.

EDIT: More word-shifting? Eh, screw this. Karan told me there'd be changes around here. After two years, I should have known well enough to call a liar a liar. It is with great pleasure that I am now bowing out of here for good. Those of who need to reach me know where I can be reached. Goodbye.
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Last edited by stonedsurd; 20-02-12 at 11:26 PM.
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Old 20-02-12   #15
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Re: The Kingfisher Tamasha and Collapse of Aviation Industry in India

Well sadly we cant take a step backward... If the railways want to give a fight to the airline industry, they must first upgrade the archaic rail network and the hundreds of bridges that have been standing since the British Raj. So that their rail systems can be upgraded to handle the high speed traffic that will eventually run on em..

Which would again require thousands of crores, again in tax payers money. ..
Fight to the Airline industry? Surely you jest. The Indian railways carries 10,950 million people per year and the Airways carries 54 million people per year (and dont even talk about freight). It is obvious that it is the railways which moves India. The Airlines are nowhere close and never will be. It is a different matter that airlines get all the glamor and attention from the media.

Secondly, there are many bridges in India (upto 200 years old) which were built by the British which are still in good shape. Some of these can withstand even high speed trains. In China there are bridges which are thousands of years old and still in use. With modern technology it is possible to build great bridges which will last us a thousand years. This is taxpayers well spent and the Indian people will benefit from this for generations.
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