'We’ll do whatever it takes to be economically viable'
A day after announcing a partnership with Jet Airways that triggered layoffs, Kingfisher Airlines Chairman Vijay Mallya said they will do whatever it takes to be economically viable, reports Samiran Saha.india Updated: Oct 15, 2008 22:00 IST
“We will do whatever it takes to be economically viable,” Vijay Mallya, chairman, Kingfisher Airlines, said on Wednesday, a day after announcing a partnership with Jet Airways that triggered layoffs and consequent protests from affected workers. Kingfisher is all set to lay off nearly 300 employee for “economic viability”.
As Mallya drove down Naresh Goyal, chairman, Jet Airways, in a golf cart to the Begumpet Airport, the venue for the four-day India Aviation jambooree, the scene looked picture perfect. The romance could well be termed “love in the times of global meltdown.”
What lies behind this new found friendship is the fact that both carriers are now looking at each other for support and have chosen to join hands as a matter of convenience. They have joined hands for an “operational alliance” aimed at cutting costs and saving Rs 1,500 crore per year through the agreement.
On being asked if more layoffs were on the cards, Mallya said, “I cannot give you a forecast of what I will do tomorrow.”
Jet has already laid off nearly 700 of its temporary staff to reduce flab and bring in operational efficiency. Another 1,000 employees could be laid off in the near future.
The operational alliance will work towards route rationalisation (the two airlines will not fly on common routes) and formation of a common crew. Both Mallya and Goyal asserted that there would be no swapping of equity.
According to Jet Airways chairman, excess capacity cannot stay. “If we keep looking at a market share, it will lead to bankruptcy” he said.
Analysts were surprised by the alliance announcement. “It is a surprise move, but a mature one, Kapil Kaul, CEO, Centre for Asia Pacific Aviation, said. “But how deep the cooperation and engagement is not yet known.”
First Published: Oct 15, 2008 21:57 IST