Low-cost Kingfisher Red to fly no more
Vijay Mallya (right), chairman of Kingfisher airlines, claims similar operating costs between its low-cost and full-service economy seats have prompted the decision to close Kingfisher Red. Kingfisher has announced its budget carrier Kingfisher Red will close within four months.
Over the past six months, the company claims that Kingfisher's full-service economy class has generated higher profits and demand than its no-frills younger sister.
Kingfisher is now moving away from the trend of low-cost travel, claiming that the operating costs for both low-service and full-service airlines in India are too similar in terms of fuel, airport charges and crew costs.
"We are doing away with Kingfisher Red because we don't intend to compete in the low-cost segment," said Kingfisher chairman Vijay Mallya.
Mallya purchased Air Deccan -- India's first low-cost airline which was founded in 2003 -- and re-branded it Kingfisher Red in August 2008.
"We believe there are more than enough guests who prefer to travel the full-service Kingfisher Class, and that shows through in our own performance where the load factors in Kingfisher Class are more than in Kingfisher Red," the chairman said.
Kingfisher is India's second largest carrier in terms of the number of passengers, but had accumulated losses of more than Rs 4,300 million at the end of the last year.
The loss-making airline predicts that in future there will be a price war between low-cost carriers due to an over-capacity in the market.
