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
Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
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

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments