Vijay Mallya: The king who fell to earth

India's self-styled King of Good Times and airline tycoon has hit turbulence. Andrew Buncombe reports from Delhi

Several summers ago, the Indian tycoon Vijay Mallya threw a party for 100 or so people at his cliff-top home in Goa. Golf buggies were used to transport guests who arrived at the gates of his Aguada property to the lawns where a barbecue of the freshest seafood awaited them. Mr Mallya, dressed in trademark colourful shirt, was a generous and gracious host, chatting with everyone and mingling at his private bar. The beer he served was chilled Kingfisher.

For many years, Mr Mallya, the man who models himself as the King of Good Times, has been inseparable from his Kingfisher brand; be it his ubiquitous beer, his Formula 1 racing cars or his airline. It is said he personally interviewed the young women who would serve as stewardesses. And for most of that time, the strategy and flamboyance has served him well.

Now, however, the 55-year-old finds himself in front of the media for quite different reasons: trying to explain why his airline is not enjoying quite such a good times. It has been forced to restructure debt and look for an injection of capital after it posted quarterly losses of 4.7bn rupees (£58m).

He had been forced to address the situation not simply by the bad figures, but by his decision to cancel dozens of flights as part of a restructuring that will see his budget airline business, Kingfisher Red, scrapped and a concentration on the more profitable, full-fare market. This will require a reconfiguration of many of his planes. The low-cost end of the industry, he said, was likely to turn into a "bloodbath".

During a two-hour press conference last week, Mr Mallya and Ravi Nedungadi, the chief financial officer of United Breweries Group, the parent company, blamed soaring jet-fuel prices and high taxes levied by state governments. Another factor, Mr Mallya said, was the current weakness of the rupee. They outlined a plan to raise around 10bn rupees in new loans for Kingfisher, including 1.5bn rupees that would be spend on the overhaul of the aircraft. He said he had even considered importing jet fuel to avoid high taxes.

"The state governments are enjoying windfall profits directly at the cost of the aviation industry," he said. Yet he also scolded reporters, saying: "To write the epitaph of Kingfisher Airlines constantly is not fair."

It is unlikely that Mr Mallya is going to be forced to sell off his Goan home, with its elegant interiors reportedly chosen by his second wife, Rekha, or his £63m yacht, the Indian Empress, which he keeps to sail in the Arabian Sea.

Likewise, there is no sign that Mr Mallya intends to offload his cricket team, the Royal Challengers of Bangalore, which perform in the hugely successful Indian Premier League that the tycoon bought in 2008 for £70m.

His main cash cow, the distillery and brewery business UB Group, which includes his purchase of Whyte & Mackay, continues to be very healthy. Recently the spirits arm of the company claimed a 46 per cent rise in profits for the six months to the end of September.

But Mr Mallya's Kingfisher troubles, and his apparent frustration with the media, whom he keeps accusing of misreporting events, certainly appear to highlight both the challenge of the airline industry in India and the danger confronted by those who seek to expand quickly.

One business analyst, who asked not be named, said that Mr Mallya has been hit by the high fixed-costs faced by all airlines, in particular that of jet-fuel. "Whether you are flying richer, business travellers or poorer farmers, these fixed costs are the same," he said.

The analyst said that Mr Mallya had made the 2008 purchase of Air Deccan, which became Kingfisher Red, at the top of the market. Since then, the environment had been tough for all operators, particularly those who were seeking to expand.

Kingfisher started flying to London three years ago and secured the number two position in the Indian airline business. "Business opportunities are big and operators feel the need to expand quickly to get a large slice, rather than focusing on a narrow share," he said.

Mr Mallya appears upbeat. One report suggested that he was close to sealing two separate deals worth a total of £235m; one with a private Indian investor and the second with a consortium of 14 banks, led by the State Bank of India. On Twitter, Mr Mallya subsequently said the report was "factually wrong", though he did not provide further details.

Over the weekend, Mr Mallya declined several requests for an interview and a spokesman for Kingfisher failed to answer questions about the airline's future. The spokesman said Mr Mallya had a busy schedule, but the truth may have been a little more nuanced. Over the weekend, he took again to Twitter to announce: "Enjoying a chilled Kingfisher in a Goan shack. Overwhelmed with affection [and] good wishes from so many people despite murderous media reports."

Flying high: the CV

The colourful business tycoon Vijay Mallya is the son of an industrialist, the late Vittal Mallya. He owns a cricket team, an airline, a luxury yacht, a number of vintage cars and a Formula One racing team.

He is also a member of the upper house of the Indian parliament, where he sits as an independent.

Yet it is his ownership of United Breweries, famous for its Kingfisher beer and cheap whisky (as well as the distinctly more upmarket Whyte & Mackay), that brings him his wealth, put by Forbes at £900m.

He also has a love-hate relationship with the media. While he appears to enjoy the coverage of his lavish parties, he has been less impressed by the coverage of his airline's recent problems.

Suggested Topics
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
Travel
travel
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
i100This Instagram photo does not prove Russian army is in Ukraine
News
Morrissey pictured in 2013
people
Sport
sportVan Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Life and Style
Martha Stewart wrote an opinion column for Time magazine this week titled “Why I Love My Drone”
lifeLifestyle guru Martha Stewart reveals she has flying robot... to take photos of her farm
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Environment
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices