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sri_bom
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 Posted: Tue May 08, 2007 7:35 am Post subject: Kingfisher indicates buying stake in Air Deccan |
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Kingfisher Airlines Chairman, Vijay Mallya, stated he is “interested” in acquiring a shareholding in Air Deccan, although there are no immediate plans. Air Deccan rejected the suggestion.
Kingfisher Airlines: “Am I interested [in buying stake in Air Deccan]? Yes. Am I imminently acquiring it? Not decided as yet. I don’t have any current plans to acquire Air Deccan”, Vijay Mallya, Chairman. Source: The Telegraph, 08-May-07.
Rebutted by Air Deccan Chief-
Air Deccan: “With due respect, Mr Mallya is talking rubbish...Air Deccan is not up for sale. We are actually bigger than Kingfisher and we operate in a different market. If wishes were horses he could have this airline. But let me say we are not selling out to anyone”, Capt GR Gopinath, Managing Director. Source: The Telegraph, 08-May-07.
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Nimish
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| Posted: Tue May 08, 2007 8:11 am Post subject: |
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| Capt. Gopi needs to learn to watch his mouth. Instead of reacting in this silly and immature manner, it might have been better to keep quiet or just ask for the progress that Mallya's making in his desired direction. |
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HAWK21M
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| Posted: Tue May 08, 2007 9:59 am Post subject: |
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Gopi sounds irratated & VJM seems optimistic.I guess the mounting losses will force AD to sell unless there is a turnarund by someone taking a stake in AD.
Remember a takeover with losses is expensive too & IT is not out of the red yet.
regds
MEL
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the_380
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| Posted: Tue May 08, 2007 11:27 am Post subject: |
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| Nimish wrote: | | Capt. Gopi needs to learn to watch his mouth. Instead of reacting in this silly and immature manner, it might have been better to keep quiet or just ask for the progress that Mallya's making in his desired direction. |
Nimish, even if in his heart Gopinath might be thinking of selling some shares to VJM to get money, at the moment he CANNOT keep quiet and must show a reaction that he is "not interested" or he is "pissed off" reason is so hat their shares don't go down.
| HAWK21M wrote: | | IT is not out of the red yet. |
That is the biggest threat for VJM, if he takes on DN and cannot manage to get his own Kingfisher Airlines atleast into green figures then he's virually out of the aviation world. Because bringin DN to green is a HARD task
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Nimish
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| Posted: Tue May 08, 2007 12:13 pm Post subject: |
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| the_380 wrote: | Nimish, even if in his heart Gopinath might be thinking of selling some shares to VJM to get money, at the moment he CANNOT keep quiet and must show a reaction that he is "not interested" or he is "pissed off" reason is so hat their shares don't go down.
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Avi - any talk of an M&A normally takes the stock price up, not down. So if VJM were to say that he's interested in buying, it's likely to take the prices of DN up in the short term.
If you don't want to comment, you just issue a standard bland denial. DN's PR dept (if it exists) will take 20 seconds to issue such a standard denial.
But this is getting personal - "talking rubbish", "Wishes were horses" etc. - shows a complete lack of respect. |
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HAWK21M
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| Posted: Tue May 08, 2007 1:12 pm Post subject: |
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Personally Im surprised that VJM answered that way.Wonder why.
regds
MEL
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karatecatman
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| Posted: Tue May 08, 2007 1:13 pm Post subject: |
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More Capt. Gopinath reactions:
‘‘We are from different planets; he is from Venus, I am from Mars,’’ Gopinath told AFP in Bangalore where both airlines are based.
‘‘We are from the opposite ends of the business spectrum, consumer models and consumer space.
‘‘We are mining the bottom of the pyramid, he is picking the cream off the top.’’
Gopinath, who needs capital to expand his airline, said there was ‘‘absolutely’’ no chance of Air Deccan selling a stake to Kingfisher.
‘‘He may want to buy the moon but the moon may not be available for sale.’’
‘‘We are good friends and enjoy drinking a beer together,’’ Gopinath said. ‘‘But that’s about all. Our vision and philosophy are totally different.’’
Kapil Kauls' reaction:
‘‘Gopi is in the market to raise capital but he obviously wants it from financial institutions, not a strategic investor.’’
‘‘This won’t stop consolidation of the industry, which is necessary and inevitable, to bring stability to a fragmented market, cut costs and enable the industry to find its feet.’’
AFP ends by saying:
Flashy clothes, lavish parties and an enormous yacht have earnt Mallya the knickname of India’s Richard Branson, after the flamboyant British businessman.
The village-bred Gopinath dresses like a white-collar office worker, dons ordinary spectacles and keeps a low profile.
Still he said he gets along well with Mallya personally. |
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sri_bom
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Joined: 22 Dec 2006
Posts: 2365
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| Posted: Wed May 09, 2007 9:33 am Post subject: |
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Here is the latest spat:
Quotes of the Day
Air Deccan: "[Vijay Mallya, Chairman/CEO of Kingfisher Airlines] may want to buy the moon, but the moon may not be available for sale. We are from different planets; he is from Venus, I am from Mars. We are mining the bottom of the pyramid, he is picking the cream off the top. We are good friends and enjoy drinking a beer together, but that's about all. Our vision and philosophy are totally different”, Capt GR Gopinath, Managing Director. Source: AFP, 09-May-07
Kingfisher Airlines: “Captain Gopinath has over reacted. What is he trying to prove? I am interested in Air Deccan. Is he trying to say no one can be interested in a public company that Deccan is. I don’t know what provoked this harsh reaction. Deccan is suffering huge losses”, Vijay Mallya, Chairman & CEO. Source: Times of India, 09-May-07.
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COUGAR
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Joined: 01 Jan 2007
Posts: 986
Location: Bangalore
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| Posted: Wed May 09, 2007 10:06 am Post subject: |
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Deccan is suffering huge losses
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Well well well: so is KF! Both are burning money. However DN shows a better chance of recovering losses because a. it has a larger and more distributed fleet, and b. its yield shortfall per passenger is less than HALF of what KF is facing. Combine that with the fact that KF operates on a higher cost base and the writing is on the wall for KF! I wouldnt be surprised if KF shuts shop in a couple of years because their cash burn is simply huge!
KF needs an LCC and the fleet commonality etc with DN may be a plus. However DN has charted an independent course and have confidence in their plan. And as in investor with a little knowledge of the aviation market, the DN model inspires a lot more confidence in me than the KF model. All that DN lacks right now is a. proper processes which I htink need to be put in place, and b. Some infusion of capital from a Private equity placement route: Reliance-ADAG should be interested because DN makes perfect sense as an investment for multiple reasons.
Nimish: Gopinath cannot be blamed for reacting furiously to VJM's cowboy antics. Think about it: Gopi has a dream for the Indian masses, and however rough at the edges it may be right now, DN is an idea with potential. He is a common man who is fighting against the tide to give the the aam-admi wings.
VJM's attitude towards DN is similar to the attitude that the Wadias once famously showed towards Dhurubhai Ambani: that look kid, this is an elite club with a "no entry for aam-admi and dogs" sign outside and you people just dont fit in here. So while you may have made it this far its better you sell it off to us right now and move on or else we will eat you alive!!
Now imagine if Dhirubhai had sold off Reliance (then just a measly supplier of raw polyester to Bombay Dyeing) to Nusli Wadia, would we reliance industries today? Do you see that RIL is a hundred times larger than the Wadia group put together?
So KF may be advised to look elsewhere in its search for an LCC. How about Indigo: again all airbus fleet and a more upmarket image than DN! Why doesnt VJM go fishing there? Scared the Indiglobe fellas will eat you raw eh Mallya?  As i said, the "club concept" at work here.
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COUGAR
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| Posted: Wed May 09, 2007 10:14 am Post subject: |
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Apart from looking for funds through the private placement route, DN needs to do the following:
1. Revamp procedures: Introduce assigned seating, improve baggage handling and improve the ditribution network. Right now there are too many chinks in the armour.
2. revamp A320 operations: From what I have studied, DN's ATR ops are generally better run and profitable than their A320 ops. Unfortunate because A320 ops if properly run have benefits of scale.
3. Foreign managers dont always mean better managers. Gopi should talk to Mr.Trivedi and others at IC. With IC's merger into that shithole AI, i am sure their talent would be better utilized here. Imagin what Trivedi and IC's famous "Teen Deviyaan" managers could do with DN!
Is Gopi listening?
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HAWK21M
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| Posted: Sat May 12, 2007 9:18 pm Post subject: |
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If Things don't go as planned.VJM may face a tough road ahead.
BTW whats ITs profits this qtr.
regds
MEL
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COUGAR
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| Posted: Sat May 12, 2007 9:34 pm Post subject: |
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Profits? he he! You must be joking!
Losses of about 350 crores between March 2005 and Spe 2006.
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victor2alpha
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| Posted: Sat May 12, 2007 9:48 pm Post subject: |
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He just wants it coz of its connectivity..
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COUGAR
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| Posted: Sat May 12, 2007 9:57 pm Post subject: |
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Not just connectivity.
Its about gaining the ability to tailor route structure to maximise yields. some markets dont support a full-service carrier, while some markets can support EITHER a FSC or an LCC but not both.
Acquiring an LCC gives the airline the ability to serve both markets.
As long as Jets didnt have an LCC KF and Jet were on par. With Jet acquiring S2 the dynamics have changed.
However DN is not the "right fit" for KF. I would suggest Indigo (not that they are selling) or G8!
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HAWK21M
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| Posted: Sat May 12, 2007 10:35 pm Post subject: |
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Stability first should be the magic word.Show profits.
regds
MEL
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karatecatman
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