MALLAYA :THE STORY

 Vijay Vithal Mallya, one of the most flamboyant personality of India & who claimed himself as king of good times & was often reffered as Richard Branson of East. In present times, he is fugitive, willful defaulter sought by Enforcement Directorate of India for Money Laundering from being known for his calendars, to became "poster boy" of bank defaulters. Mallya really has came a long way. His story is perhaps, one of the best examples of riches to rags story.

               So, where does the story 'START' from ?

     Vijay Mallya belongs to a very well-to-do family. He is the son of Vithal Mallya who was the chairman of United Breweries Ltd (UB groups). It's a company mainly doing business in beer & liquor. His father was a good investor & he greatly expanded the business. In 1983, due to death of his father Vijay Mallya inherited UB groups, at the mere age of 27.

     Despite being young & inexperienced, Vijay Mallya soon turned UB groups into India's biggest spirits maker. When he took over the business it was just doing a profit of 300 crore, but few years later, under Vijay Mallya, UB group made a profit of 6000 crores.

     So, How he made such a huge profit, despite the fact that advertising of alcohol is banned in India. 

     Vijay Mallya to market his business & creating a brand, started doing content marketing.

               So, what is content marketing ?

content marketing is basically the strategy of putting out content & letting the content do your marketing for you.

Mallya for creating a brand for his product

          1. named his house as Kingfisher Villa

          2.he did event sponsorships, arranged Kingfisher Ball

          3. Bought an IPL team, Royal Challengers Banglore

          4. Started Force India

          5. Kingfisher Calendar & luxury parties

Because of all this, he soon came to be reffered as "playboy of the East". In 2015, UB groups became second largest liquor maker in the world. Forbes magazine in 2007, called him the 40th richest person in India. South California University conferred on him Doctorate in business administration. And he received, France's highest civilian award.

     Cometh the year 2005, Vijay Mallya on Sidharth Mallya's 18th birthday, launched Kingfisher Airlines. Despite having, no experience in aviation Industry, soon Kingfisher Airlines (KFA) rose to 2nd spot in domestic airlines. KFA was known for luxury travels.

Soon, vijay Mallya wanted his airlines, to be on International routes. But in aviation Industry, to run the International routes, an experience of five years is needed.

     Instead of waiting for five years, Vijay Mallya decided to acquire Air Deccan. Air Deccan was known for its low cost, & KFA which was known for its luxury, it seemed like a add choice. But, Not to Mallya, because Air Deccan had 4 years of experience on domestic routes, so KFA had to only wait for 1 year to run on International routes. Mallya took debt for acquiring Air Deccan, and renamed it as Kingfisher Red.

     So, with KFA, two categories of Airlines  emerged :-

                    1. Kingfisher Red (Low air fare ticket)

                    2. Kingfisher (high priced ticket)

But, the thing was even if Kingfisher red has low priced ticket, it provided facilities, almost equal to Kingfisher. So, it obviously resulted in shifting off Kingfisher's customer base to Kingfisher Red. All this is a perfect example of Corporate Cannibalism.

               What is corporate cannibalism ?

Corporate Cannibalism is a product's decrease in sales volume or market share, after a new product has been launched by the same company.

     Soon, the prices of Kingfisher Red was increased, to provide for operating cost. Because facilities delivery requires money. But, it worked against KFA & public soon shifted to other low cost airlines, such as IndiGo.

     Banglore & Hyderabad airports, soon started to ask KFA for landing charges, before landing there. It was clear, these airports, in someway banned KFA. One misery after another, HP & Bharat Petroleum, refused to supply fuel to KFA, because of outstanding dues. Indian Oil agreed to provide fuel, but first they wanted cash. Kingfisher credibility was doubtful in whole market. As business was becoming very difficult, Mallya sought FDI from Etihad & they even agreed, But airline business at that time was 100% domestic owned. No doubt, Etihad offer went away.

There was non payment of salaries to Employees, employees after several months of strike left the job. Kingfisher airlines closed in 2012 December meanwhile, a question arises, how he was getting the money fuel & operating cost, during the year of losses & financial crises of 2008 ? obviously he turned to banks, He got 1600 crore from SBI & used that money to fund his activities, For more money, he again went to SBI, SBI refused this time. For applying to other banks for loan, an NOC from SBI was needed. Mallya even got that, Political Influence do works.

     Despite doing everything, losses were still occuring & debt was increasing. He took loans of around 6600 crores from many banks. It total, he had to pay 9000 crore including interest to banks. When the banks were about to approach the apex court, six day earlier, Mallya had already left Indian shores, becoming a "willful defaulter".