Spicejet aspiration too expensive for Kingfisher: MallyaJuly 15th, 2008 - 4:55 pm ICT by IANS
By Dipankar De Sarkar
Farnborough (Britain), July 15 (IANS) Consolidations are still the preferred option in the current uncertain aviation climate, Kingfisher Airlines chairman Vijay Mallya said here Monday, a day before low-cost carrier SpiceJet rejected a share-swap deal with his airlines. “I still make the point that for any small player it is far more vulnerable to be a small independent player in today’s context,” Mallya told reporters Monday at the Farnborough airshow in Britain, where he unveiled an A-300 airbus newly-acquired for Kingfisher Airlines.
“Consolidation is a classical play in any difficult market environment. It has been practised all over the world in many industries and many sectors,” Mallya said.
Giving the example of the Deccan-Kingfisher merger, Mallya said the move had helped realise “huge amounts of synergy”.
“The reason why we’ve been able to find innovative ways of tackling our fuel bill - where we are going to redesign the system of buying aviation turbine fuel - is that we have the scale and size to do so after I bought Deccan.
“Kingfisher alone, or Deccan alone or some other airline alone would not have the scale and size to drive such economies.”
In his comments, made aboard the newly-acquired aircraft, Mallya appeared to anticipate SpiceJet’s rejection of his offer, saying: “I’ve made very clear before, I like to do good deals and I will not do expensive deals.”
“They have a certain aspiration which is an aspiration that I cannot meet,” he said.
“They need cash. They have other options through bonds and other mechanisms to raise that cash.”
In a regulatory statement Tuesday, SpiceJet announced American billionaire Wilbur Ross would invest $80 million in it, picking up a 25 percent stake in the low-cost carrier.
The announcement effectively rejected a share-swap deal with Kingfisher that was under negotiation in recent weeks.
Tags: aspiration, consolidations, deccan, dipankar, farnborough airshow, fuel bill, good deals, independent player, kingfisher, kingfisher airlines, low cost carrier, market environment, preferred option, sarkar, share swap, spicejet, swap deal, turbine fuel, vijay mallya, wilbur ross