Vijay Mallaya grounds low-cost carrier Kingfisher Red

Mangalore Today News Network

New Delhi, September 28, 2011: Kingfisher Airlines today said it will stop operations of its low cost airlines Kingfisher Red. Announcing this decision, Chairman Vijay Mallaya said, "We don’t believe in low cost operations anymore.”

Mr Mallaya had started Kingfisher Red after buying out Deccan Airlines.

The cash strapped airline has never reported profits since its launch in 2006. In the last quarter, the airline had reported losses of Rs. 264 crore against losses of Rs. 187 crore in the corresponding quarter of last year. The company has huge debt levels, which currently stands at Rs. 6,000 crore.

Analysts said this was a strange move because 70 per cent of the company’s business came from its low cost division. However, Kingfisher’s stocks rose after the announcement. Kingfisher has a market share of nearly 20 per cent.


Courtesy: NDTV