Should Government Bail out Private Companies Who are on the Verge of Bankrupcy?   7 comments


I would Like to Raise Some Issues in this Regard .I will be Considering Kingfisher Airlines as Case Study

As a Popular Saying Goes “If you are a Billionaire and  want to be a Millionaire then own a Airline “.Government  Aviation Policies have  not helped a sector which has been crying for help post 2008 Economic Crisis. They have Requested Government to have uniform Fuel Surcharge Tax Across the Country.Especially with so many Airports under Construction in Tier-2 Cities .Monopoly of a Single Airline is bound to spell Doom .Competition in this sector is bound to be healthy as Ultimately  Customer is a the Beneficiary in terms of pricing .

However Kingfisher is responsible for it’s own crisis not anybody else when Jet , Spice ,Go Indigo etc are still Operating with same Ticket Price What is the Reason for Kingfishers Fall?

Does it mean that the annual loss of Rs.1000 Crores is due to routes connecting Tier-2 Cities ?. It is obvious that airlines business is not profitable currently. But Kingfisher is almost at the verge of bankruptcy, the reason for which is his own mismanagement and misplaced priorities.

Getting the cabin crew hand-picked and having Yana Gupta demonstrate safety instructions might have attracted initial attention. But, people value on-time performance more than looking at glamorous girls from a distance in their two hours of flight. After all, we see thousands of them in Lokhandwala, Bandra or other localities/cities.

Moreover, he chose routes according to his whims and fancies without a proper market study. Almost all the airlines started with lucrative middle east market, while KF chose Bangalore-London for its maiden route in the international sector, just to realize later that there is not enough demand. Indian aviation market is all about value-for-money and if he is not interested in that market, he better be out of the business or suffer a loss.

I believe The Best the Government should do is open up Aviation Market for FDI (Foreign Direct Investment ) and set a plank for Kingfisher and others to come out of the Mess they are in .They Hand over People’s Money to a Private Airline Carrier .

If Government Bails out Kingfisher then it will be compelled to Bail out Future Indian Corporation which file for Bankruptcy .When Satyam was not bailed out of Crisis then why Kingfisher? .Just Hope We will not Witness an Another Scam and Government Must Realize in a Country where  only 6% People can Afford Air Travel it should use the funds for Welfare of People than corporation . It should First Revive Air India than  worry about Private Corporations

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Posted November 14, 2011 by avinash2060 in Uncategorized

7 responses to “Should Government Bail out Private Companies Who are on the Verge of Bankrupcy?

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