Mallya dumps Kingfisher Red - exits low-cost operations

28 Sep 2011

1

Bangalore: India's Kingfisher Airlines will exit its low cost operations Kingfisher Red, owner Vijay Mallya told reporters after the company's annual general meeting on Wednesday. He also said a Rs2,000 crore rights issue will be pursued to spruce up the financials.

"Yes, we are doing away with Kingfisher Red. We don't intend to compete in the low-cost segment. But all is not gloom and doom," Mallya said at a press conference. ''Customers prefer a full-service airline and there is an adequate supply of low-fare seats,'' he said.

The carrier's low-fare operations are run by Kingfisher Red.

Mallya converted Deccan Airlines to Kingfisher Red after buying out the pioneering operation from Cap Gopinath.

Kingfisher has a market share of nearly 20 per cent.

Market observers found this to be a strange move because 70 per cent of the company's business came from its low cost division.

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