Kingfisher Airlines Part 1 - the backdrop
By Aniket Gupta | 15 Sep 2023
Formerly one of the most prominent airlines, of the initial airline liberalization days, Kingfisher Airlines has plunged into a bottomless abyss.
In 2012, the global aviation industry faced severe challenges, characterized by persistent fuel price increases over the previous four years, turbulent financial markets, and an economic downturn. Vijay Mallya’s ambitious endeavor, Kingfisher Airlines, often hailed as “The King of Good Times”, experienced its toughest period then.
Initially conceived as an all-economy airline with a single-class seating arrangement, it still offered passengers high-quality food and entertainment systems.
History of Kingfisher Airlines
Kingfisher Airlines, founded in 2003 by the United Breweries Group, headquartered in Bengaluru entered the aviation industry during a period when low-cost airlines had revolutionized the market, making air travel accessible to a wider Indian audience.
The airline’s promoter was none other than India’s prominent liquor tycoon, Vijay Mallya, known for his dynamism, commitment to quality, and distinctive if a bit eccentric and extravagant style. He had inherited a big industrial empire from his father Vittal Mallya, who had very carefully and systematically added one company after another to his portfolio of assets.
Vittal Mallya began acquiring shares of United Breweries Limited in 1946–47. He became the first Indian director in 1947 and chairman in the following year. In 1951, he acquired McDowell & Company Limited.
In 1952 he shifted his base to Bangalore, acquired small breweries and distilleries, expanding to Kerala, Andhra Pradesh, Goa, and Bihar. By the early 1960s, he had managed to get control of Carew & Company Limited of and Phipson & Company Limited; and in the 1970s he acquired Herbertsons Limited.
Vittal Mallya ventured into food products in the 1950s with Kissan Products. Upon acquiring Herbertsons, he gained a significant presence in processed foods.
In 1977, he foresaw the impact of an official prohibition drive, acquiring more breweries and distilleries. He also set up a new plant in Pondicherry, establishing himself as India’s beer and liquor leader.
Mallya diversified into paints, pharmaceuticals, and soft drinks, chairing British Paints and Cadbury India, acquiring Hindustan Polymers and Mysore Electro-Chemical Works.
By 1981, his empire included 10 breweries, 14 distilleries, seven food companies, six investments firms, two packaging units, three drug companies, soft drink bottling plants, a battery unit, and one styrene company. He also led other firms despite not having controlling interests.
Mallya’s acquisitions reflected his ambition, shrewdness, risk-taking, and ability to seize opportunities.
Vittal Mallya passed away in October 1983 at the age of 59 years. That left his son Vijay, then just 28, to take over the reins of the family’s business.
Opulent style
Vijay quickly gained corporate fame through his opulent lifestyle as much as with his acquisition of paints company Berger Paints and Best and Crompton in 1988, Mangalore Chemicals and Fertilisers in 1990. He also acquired The Asian Age newspaper and a Bollywood film magazine, Cine Blitz, in 2001.
Vijay Mallya leveraged his popularity, bolstered the United Breweries Group’s brand and earned the tag ‘King of Good times’. That matched his image of a flamboyant playboy who indulged his penchant for fast cars, yachts, and numerous international residences, race horses, and Force India Formula 1 race team cars.
Vijay had been parachuted into the role of chairman of the UB Group after his publicity-shy father Vittal Mallya passed away in 1983. Under the son the group suddenly became very high-profile.
Where his father’s acquisitions had happened without much fanfare Vijay’s acquisitions were done in the full glare of publicity.
Under him, the group grew into a multinational conglomerate of over 60 companies, with an annual turnover of $11 billion in 1998–1999. United Spirits Ltd, the flagship company of the UB Group, achieved the milestone of selling 100 million cases, becoming the second-largest spirits company in the world by volume, under Vijay Mallya’s chairmanship. The group had breweries, distilleries, jams-and ketchup, paints, and pharmaceutical companies in its portfolio.
And then came the decline.
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