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Many of the management gurus and experts were perceived to be behind the global recession of 2008, but there is only one man who's mismanagement could have done this…yes the Big Bang collapse of India's most fashionable and luxurious airline brand – "Kingfisher". There are several reasons for the much touted financial collapse of Kingfisher which was foresaw by Gopinath and many other experts on Kingfisher board itself.
First of all, Mallya's inability to strategize and place the critical airline business on the national and global front, which is totally different both in nature as well as in approach, than his liquor business. His attitude of 'Ekla Chalo Re' in airline venture caused him much harm than good as he didn't delegate the business operations and decision making rights to other skilled executives who could have taken much better decisions than him. Secondly, he has mastered the art of squandering away opportunities, first when he acquired Air Deccan and then ignoring the microeconomic conditions prevailing within the country's boundary (where there is a sustained large market for Low Cost Carrier Airline) as majority of people belongs to the economy class, he continued to take care of the elite and executive classes. Thirdly, he always considered Air Deccan as his step child and continued allocating globally operating flight slots to Kingfisher ,completely ignoring the core competence of Air Deccan in operating flights on international skies which otherwise could have generated profits for the ailing airline carrier.
Not able to cope up with ever mounting debts due to insufficient passenger traffic on such routes and increasing fuel prices, he then resorted to salary cuts and pay loss of the airline employees which further aggravated the airline woes as the employees started venting out their frustration in the form of misbehavior and mistreatment of passengers which broke the cordial link between the airline and its loyal customer base. One of the board members of UB group correctly pointed out that "at the time of thinking about starting a new venture, had Mallya would have started the telephony business (which was one of the viable option mooted then), the scenario could have been different. If he could have worked on his strengths, he might had achieved a lot better than this." Airline business needs a long term vision and strong determination, infact every business does, and both have been seen missing in Mallaya's approach so far.
- Himanshu Dhumash