For the last few weeks, the Bangalore-based business tycoon, Vijay Mallya
has been going through a do-or-die situation, and he still struggles
hard to save his empire, spanning from spirits to airline. Experts go
for United Spirits, wanting Mallya to put KFA at stake.Amidst the hullabaloo, the KFA stock has became down again by 5 percent to
15.35,
following the cancellation of several of its flights from the Delhi,
Mumbai and Bangalore airports, since the pilots and engineers are on
strike. Moneycontrol.com reports that the employees are not reporting
at work due to their pending salary payments. The strike is likely to
continue as the meeting between the employees and management has failed
and the employees claim to be not assured of their salaries.Moreover, the aviation regulator, DGCA has summoned KFA’s CEO Sanjay Agarwal in the backdrop of the flight cancellations. And a CNN/IBN report says that the airline is close to facing a shut down threat from the Aviation Ministry. Arun Misra, Director General of Civil Aviation said, “We are considering, examining the whole situation.”Mint reports since the airline is currently flying only seven planes and as per aviation norms, once a fleet size falls below five, the airline is likely to face a shutdown.
Since Mallya has failed to attract investors, the analysts say that, it is better to use his energy to rescue the other assets, then to keep clinging over the airline business, which is showing only meager progress. Many of them predict to see him ending up in concentrating on the less prestigious fertilizer and engineering businesses and the spirit companies.
The brokerage CLSA notes, “… would not be surprised to see him continue with United Spirits no matter what happens with Kingfisher. It (United Spirits) is a solid company with a great reputation in India, with a 50 percent of market share, and a steady growth with several excellent brands … the operations continued to improve with Mallya’s direct involvement at the top.”
