Kingfisher Airlines (KAL), promoted by maverick liquor baron, Vijay Mallya, chairman, United Breweries, is taxiing on the runway. Scheduled to take off on May 7, 2005, the birthday of Mallya's 18-year old son, Siddharth, KAL has already signed contracts with Airbus Industries, to acquire 10 A-320 aircraft on firm order with options to buy another 20 until 2008. Apart from these aircraft, which come at a combined price tag of up to $1.8 billion or Rs 8,100 crore, the airline will lease four A-320 aircraft.
The acquisition of the new aircraft is over and above the four leased aircrafts for which the company has already signed agreement. Deliveries of the leased aircraft are due to begin in April this year, while those of the ordered aircraft will start in September 05. All the aircraft will be powered by International Aero Engines' V2500s.
In that sense, KAL has taken a lead over low-cost airline Air Deccan, whose A 320 aircraft are arriving later. However, KAL promises to be different from Air Deccan in many ways. For starters it will not compete with Air Deccan in fares.
Mallya promises to offer fares that are about 25 per cent lower than those of Jet Airways, but with some frills. Thus the airline will not have the traditional first, business or economy class seating. Instead, the entire aircraft will comprise a single cabin, dubbed Funliners. Each of the A320s will seat 174 passengers in the single cabin and, for the first time in the country, personal video screens will be fitted in the back of each seat. The seats will also be an inch wider than the economy class seats in other airlines.
Airbus' A320 family is the acknowledged technological leader in the single-aisle class, with advanced features such as fuel-saving wingtip fences, weight-saving composites, and the reliability that comes from its modern design and ease of maintenance. It also consistently leads in independent passenger and operator surveys.
Says Mallya, "We are offering our passengers more than just value-based fares, we will offer a complete lifestyle experience."
According to him, Kingfisher's low cost translates into a cost efficient airline with the lowest seat mile cost in the industry, expected to to be achieved through online reservations and outsourcing of services without compromising quality and safety.
For KAL, low costs mean no elaborate meals on board and no paper tickets, though the interiors will be aesthetic and classy and, if Mallya is to be believed, the airline would have fashion models as in-flight attendants to make flying Kingfisher a more memorable experience.
In the past few years, stiff competition in the marketplace has led to a number of companies in the US and Europe offering upmarket products and services at no frill prices also called 'masstige' or 'no frills chic' products. US airlines like JetBlue and Song are cases in point as they provide wide, all-leather seats, free TV with 24 channels, 100 audio channels and pay-per-view movies. According to Mallya, JetBlue and Song are the inspirations behind KAL more than the low cost, no frills Ryan Air and UK's Virgin Air.
Though Mallya is reasonably upbeat about the future of Kingfisher Airlines and plans to offer flights to Singapore and Malaysia, the government has allowed only airlines with five years' flying experience to fly abroad, which may be detrimental to the airline in the long run.
Also, the fact that Kingfisher Airlines will not be significantly cheaper than Indian Airlines or Jet Airways may not exactly work in its favour, notwithstanding fashion models and individual videos.
However, what will work for it is the fact that air travel in India is growing at 25 per cent per annum and there is place in the domestic market for at least two more carriers. Moreover, since the airline is going in for only new aircraft, Kingfisher will have the youngest fleet in the world till mid-2007, which could work in its favour later.
also see : High on Kingfisher