Vijay Mallya flies into London

Vijay Mallya, the chairman of United Breweries Group and Kingfisher Airlines, is known for his huge wealth and businesses in India, as well as his Bollywood-esque flamboyant dress sense and lavish parties on his yacht. But, to date, his airline has never given global airline bosses reason to sit up and take notice.

This all changed yesterday when Kingfisher Airlines, named after the brewing giant's Kingfisher beer, made its inaugural international flight from Bangalore to Heathrow's Terminal 4. With this flight Kingfisher joined British Airways as the only airlines to fly daily between London and Bangalore, the IT capital of India.

But the flight to London was just the first leg of a rapid international expansion offensive that will include inaugural flights to 12 global cities, as Kingfisher seeks to shake up the luxury end of the global aviation industry.

But who is Mr Mallya, why is he launching in the middle of grim times for global airlines, and how does he plan to compete with British Airways?

Certainly Mr Mallya is a larger-than-life character. At a plush hotel in central London, he stands out with his goatee beard, diamond earring, tinted sunglasses and billionaire's watch. More cheekily, Mr Mallya, who has a net worth of US$1.2bn, according to Forbes, is typically photographed with bikini-clad models at the launch of the annual Kingfisher Calendar, although he does not actually appear in it.

He is also involved with a wide range of sports, including co-owning a Formula One racing team called Force India.

On the airline tarmac, Mallya has big ambitions to grab a larger slice of the upmarket international airline market. On 26 October, Kingfisher Airlines plans to launch a second flight to London from Mumbai. Mr Mallya said he would consider flying from a third Indian city to Heathrow, but declined to say if this would be Delhi.

Over the next three months, Kingfisher Airlines also plans to launch flights to San Francisco in the US, Dhaka and Chittagong in Bangladesh, Riyadh and Jeddah in Saudi Arabia, Mali, Kuwait, Dubai, Colombo in Sri Lanka, Thailand's Bangkok, Singapore and Hong Kong.

Asked why he is launching his airline internationally at a time when airlines are being crippled by soaring fuel bills, Mr Mallya stresses the potential in the booming Indian economy, as opposed to the slowdown in West.

"You are looking at it from a Western point of view," he says. "From an Indian point of view, India is booming and there is massive demand for international flights."

Mr Mallya's whole psyche is programmed to tap into the growing wealth of the Indian middle classes. For instance, in 2007, United Breweries Group bought the Scottish whisky maker Whyte & Mackay in a £595m deal, as Mr Mallya identified strong demand for India's middle classes quaffing the tipple.

Of India's population of 1.2 billion, 300 million are middle class, but this affluent group is expected to grow to 400 million by 2010. Mr Mallya said that, three years ago, there were 14,000 millionaires in India and now there are 200,000. Kingfisher offers 460 flights to 65 destinations in India a day. The London flight certainly should not suffer from lack of demand, as scores of Indians have relatives in England and IT services companies, such as Bangalore-based Infosys, have a growing list of clients on these shores.

However, Mr Mallya is also launching internationally because his Indian rivals, such as Air India, offer international flights, as part of their loyalty card programmes.

Good fortune has also shone on Mr Mallya recently. For instance, the Indian government changed the regulations governing Indian airlines to allow a domestic carrier – Kingfisher Airlines started in 2005 – to launch internationally after just three years instead of five years previously.

Furthermore, on Monday this week, the Indian government cut the domestic tax on fuel by 15 per cent, which will save Kingfisher Airlines about £400m a month.

Kingfisher Airlines forecast a £100 million pre-tax loss for the year to 31 March 2009, dragged down by fuel costs, on estimated total sales of £1bn.

In terms of its UK operation, Mr Mallya is cautious about its profit targets for the first 12 months during which he expects Kingfisher to "break even". Mr Mallya forecasts its Bangalore flight to London will deliver "minimum" sales of £60m in its first year.

However, Mr Mallya is confident that it can give British Airways and other international airlines a run for their money. He says: "Kingfisher is Harrods in the sky. We have always focused on delivering superior value, a full-blown first-class experience at a business-class fare, and a premium-class experience at an economy fare."

More specifically, Kingfisher first class offers an in-seat massager, a five-course meal, a social area comprising a bar with a bar tender and a break-out seating areas fitted with couches and stools, and live TV. No doubt, Indian travellers to England will be keen to watch live cricket matches.

Mr Mallya has British Airways in his sights. The Bangalore-to-London route will offer just two classes of service on an Airbus A330-200: 30 seats in Kingfisher First class for about £3,000 return; and Kingfisher class – equal to premium economy at other airlines – for £560, although prices change every day and depend on the reservation channel.

Mr Mallya said: "Our product offer is vastly superior [to BA's]. In fact, our Kingfisher First [class] is comparable to BA's first class in every way but we offer it at BA's business class price."

A British Airways spokeswoman said: "All flights are on a Boeing 747 aircraft on which British Airways offers passengers a choice of four high quality cabins at competitive prices. India is our second biggest overseas market after the US. When we launch our new Hyderabad route in December, we will operate 48 weekly services to India."

Mr Mallya is "absolutely confident" there is strong market for daily flights between Bangalore and India and from Mumbai at the end of October, but his timing, with soaring fuel bills, is far from ideal. But, in the long-term, India's rapidly growing middle class should ensure that his international airline business prospers and keeps him in the lifestyle to which he has become accustomed.

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