Mallya evasive on Kingfisher revival

On a day when he had very little to offer to shareholders in terms of reviving Kingfisher Airlines Limited (KFA), its Chairman Vijay Mallya resorted to taking potshots at the media for negative coverage and managed to get business transacted at the company’s 17th Annual General Meeting (AGM) held on Wednesday.

But the AGM turned out to be a damp squib for shareholders hoping to listen to some kind of a revival plan for the beleaguered airline.

In his initial remarks, Mallya said that contrary to media reports, KFA has a fleet of 12 aircraft that fly 40 destinations. He then talked about the Centre’s decision to allow foreign direct investment (FDI) by international aviation companies into Indian carriers. Later, shareholders took the floor.

The first salvo came from the second speaker, a shareholder who introduced himself as Wing Commander (retd) N Raghuram, and said that he is a vendor to KFA for the past five years. He referred to KFA’s perennial losses and asked Mallya: “Why the same management should continue if it is not competent? There has to be a change.”

He said KFA has not cleared his dues amounting to Rs 75 lakh for almost five years and suggested that his dues be converted into shares at a nominal discount. He also said that KFA should allot tickets to vendors like him so that they can sell them off and recover their dues. Mallya, who responded to him later, said the suggestion to convert dues into shares could be considered, but parried other questions.

Another shareholder, Manjunath, said the brand name of UB Group cannot automatically sustain KFA as the airline did not have a good revenue model and expressed skepticism that FDI infusion need not result in a turnaround.

‘God’s blessing’

He concluded by saying, “We need God’s blessings and luck to save this company.” The incompetence of the management was also highlighted by a shareholder Vivek, who said, “Somehow, there is a complete failure of management. Our Chairman has to think about it.” Srinath, a shareholder, who claimed to have 50,000 KFA shares, said though he is a cautious investor, he believed in Mallya and invested in KFA, and now regrets it.

Mallya first responded to the criticism that KFA CEO Sanjiv Aggarwal’s salary doubled last fiscal even as the airline was going from bad to worse. He said that the figures were not comparable, as Aggarwal’s salary for 2010-11 was not for the full year. He then revealed that not just foreign investors, even some domestic investors have evinced interest in KFA, which will be part of KFA’s presentation at the consortium lenders’ meeting on Thursday.

He said the carrier is in talks with overseas airlines for investment. When asked if the debt-ridden airline is in touch with overseas airlines for investment, Mallya said, “Yes, we are in talks.”