“When asked what the learnings from Kingfisher Airlines experience were, Tony Fernandes said: “Focus. I have said it to Vijay many times. This is damn bloody tough business. People saw me running around in a T-shirt and a cap and said well if that Indian guy can do it then I can. Vijay was one of the many billionaires who got into the airline business, but it is a very, very tough business. You can lose a fortune very quickly. You have to be meticulous and it needs focus. The Air Asia model has been the same for 11 years. We did not even think about India because we knew we would get killed in the early stages. Vijay went from a low-cost to a premium, to a long-haul airline, to a short-haul airline, to a turbo prop with the buying of Air Deccan. You know it was like a biryani. It was all mixed up. It was bad biryani which India does not have much of.”
TONY FERNANDES NDTV Profit (1 July 2013)
This is my 300th ‘Thought Leadership’ column for Business Daily, and I want to use it to focus your attention on one of the essentials of business.
Tony Fernandes is the flamboyant owner of Air Asia. Vijay Mallya is the flamboyant owner of Kingfisher Airlines. Both owners seem to model themselves on the original flamboyant airline owner, Richard Branson of Virgin.
Air Asia is successful. Based in Malaysia, it introduced budget air travel to the South East Asia market. It has enjoyed rising revenues and net income in recent years, a feat most other airlines have not managed to pull off. It recently launched Air Asia X, a long-haul spinoff.
Kingfisher is not successful. It has almost never made a profit since listing in India in 2006. As I have written here before, it has been on death’s door for a couple of years now. It owes its staff, lenders, airports and suppliers huge amounts, has been grounded since last year, and keeps awaiting a revival plan that never comes.
Tony gave Vijay some unsolicited advice recently (see excerpt). Much as there is a whiff of ‘schadenfreude’ attached, the advice is sound. In a word, FOCUS.
Air Asia has been what it has been for 11 years: a low-cost carrier. It maintains a simple model, and does it well. Kingfisher, on the other hand, is a ‘bad biryani.’ Too many ingredients, too many target customer segments, too many cooks led by a head chef who wanted to do it all, and who has many other dishes on the boil at the same time.
It doesn’t work. Kingfisher has tried to be the airline of choice to the premium traveller; it has tried to compete head-on with low-cost carriers, despite having a huge cost base set up for premium travel; and it has tried to win at home as well as abroad, without doing either particularly well. It is a beer brand as well as an airline brand.
Biryanis, as any chef and gourmet will tell you, are not at all easy to make. They require a great recipe; superior ingredients; painstaking attention. I have probably not eaten more than a handful of truly great biryanis in a lifetime of trying them out. I have also not personally encountered more than a handful of truly great businesses. Coincidence?
To prevent your business from becoming a bad biryani, remember the following: superior ingredients, but not too many; a tried-and-tested recipe, ideally generations old; no tampering with the essentials; and pride in a high standard that you will not allow to be lowered. Then, perhaps you, too, can create a masterpiece.
Meanwhile, I hope Mr Fernandez follows his own advice to the letter, and is not left with some unpalatable words to digest years from now.