Airlines Deals

As banners fly high in the two-horse beer market race, is SABMiller closing in on UB’s lead?

Head to head, you’d imagine there’s no comparison. Vijay Mallya’s UB group, of Kingfisher fame, is cheerfully ahead. Last year it sold an estimated 53 million cases, about half the Indian market for lager.

But SABMiller, a multinational that grew aggressive after acquiring Shaw Wallace’s beer business, is ready to go the whole hog armed with quite a few market tricks (regular advertising is a no-no) for its frothy favourites Royal Challenge, Castle Lager and Haywards.

SABMiller, which entered India in 2000 panting for brewery capacity, first set up a local unit called Mysore Breweries, struck a joint venture with Shaw Wallace & Company in 2003, and then bought out the entire business last year.

To its mind, then, the race has barely begun. Just look at the numbers, it says. With a per capita beer consumption of only 0.7 litres, the Indian market is way too flat by western market comparison.

While Kingfisher flies the skies with its brand banner (as an airline), SABMiller has mounted a stiff challenge — it claims to have cornered a third of the market. And hopes for more. Some days ago, acclaimed DJs from overseas were playing at hip nightclubs across the metros, raising mugs in honour of Castle Lager as part of the brand’s Castle Loud music initiative that’s busy throwing parties at pulsating pubs in Bangalore, Jaipur, Chandigarh and Delhi’s NCR region.

SABMiller’s strength, literally, is strong beer, thanks to its Haywards and Knockout franchises. “Strong beer comprises a major chunk — 65 per cent — of the total beer market, and SABMiller has anywhere between 42 and 44 per cent share in this segment,” says Vinod Giri, director, marketing, SABMiller India. Royal Challenge and Castle are its upmarket brands, but it may get snazzier foreign labels in too.

Does this worry UB? No, it claims. Even in strong beer, UB claims to be stealing ahead. “Traditionally, the Shaw Wallace beer portfolio, particularly through Haywards 5000, used to be the largest selling portfolio in the strong beer category,” says Shekhar Ramamurthy, executive vice-president, sales & marketing, UB, claiming that UB’s strong beer business is growing faster than that of SABMiller’s.

“In fact,” he says, “in 2005-06, UB’s strong beer portfolio has actually been marginally ahead of SABMiller’s. More significantly, our leading strong beer brand, Kingfisher Strong, emerged as the single largest strong beer brand.”

According to Ramamurthy, UB has every segment well chalked out. It has got the pub circuit hooked up for its draught beer, he says, and has taken the lead on diet beer as well. Regionally too, it has it neatly worked out.

While UB’s biggest bucks go into Kingfisher, a 20-million-cases brand, UB Export works up a froth in Karnataka, Kalyani Black Label in Bengal and Tamil Nadu, and Sandpiper in Kerala, Tamil Nadu and Delhi.

It’s not an easy business to understand the dynamics of: each brand aims at a special psychographic profile of beer guzzler. And at the end, there’s Flying Horse too — a dream brand better taken lightly than literally. Meanwhile, there’s another Kingfisher taking wing at the airport…

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Kingfisher Airlines India’s fastest growing private carrier and airline with youngest fleet in India, launched daily service connecting Ahmedabad to Mumbai, Hyderabad to Chennai, Hyderabad to Vishakhapatnam, Chennai to Vishakhapatnam and Chennai to Kochi, using the ATR -72-500 aircraft which has just been inducted into its fleet.

With 1 daily flight in each direction, these new routes will provide convenient service for Business and leisure traveler alike. With the launch of these new routes, Kingfisher Airlines will be operating 86 flights daily across 17 key Indian business and leisure destinations.

Commenting on the launch of these new routes, Dr. Vijay Mallya, Chairman and CEO, Kingfisher Airlines Limited said, “Through the launch of these 5 new routes Kingfisher Airlines reaffirms its commitment towards addressing the needs of its travelers by providing connectivity between major and minor cities of India.”

“The business track of Kingfisher Airline’s will grow by leaps and bounds through the launch of these routes and we continue to strive in providing better services and connectivity to our travelers” said Mr. Manoj Chako, General Manager, Sales, Kingfisher Airlines Ltd.

About Kingfisher Airlines

Kingfisher Airlines is India’s first and only private airline to receive the prestigious, ‘Best New Airline of the Year’ award in the Asia-Pacific and Middle East region from Centre for Asia Pacific Aviation (CAPA). Kingfisher Airlines has also been voted as the 3rd Most Successful Brand Launch of the Year 2005, in the annual Brand Derby Survey conducted by India’s leading business daily-Business Standard. In another Survey conducted by agencyfaqs.com and Brand Reporter, Kingfisher was voted as the 7th Buzziest Brand of 2005 amongst 2000 leading national and international brands. More recently, Kingfisher Airlines has bagged the “Service Excellence for a New Airline” award from Skytrax, a UK based specialist global air transport advisor.

The latest addition to the list of laurels is the “Best New Domestic Airline for Excellent Services and Cuisine” award from Pacific Area Travel Writers Association (PATWA), the biggest travel writers’ organization, representing members from 70 countries across the globe, that conducts independent annual surveys across various industries related with Travel and Tourism in order to select the best in each category. Kingfisher Airlines commenced operations on May 9th, 2005 with a brand new fleet of aircraft. Kingfisher Airlines offers Full Service at True Value and promises an unparalleled experience to the Indian air traveler. On offer are extra-wide seats and spacious leg room, delicious gourmet meals, international-class cabin crew and a whole host of comforts and delights. Kingfisher Airlines also facilitates doorstep delivery of tickets on guest request. Kingfisher Airlines has further raised the bar by introducing the Indian business traveler to a premium product- Kingfisher First, the finest experience in the Indian skies. For more information on Kingfisher Airlines log on to www.flykingfisher.com . Fly the Good Times with Kingfisher Airlines.

To view the details of the press release with the flight schedule, please copy paste the url given below in your browser window:

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Kingfisher Airlines has announced the launch of new daily services connecting Ahmedabad to Mumbai, Hyderabad to Chennai, Hyderabad to Vishakhapatnam, Chennai to Vishakhapatnam and Chennai to Kochi, using the ATR -72-500 aircraft which has just been inducted into its fleet.

With 1 daily flight in each direction, these new routes will provide convenient service for Business and leisure traveler alike. Following the launch of the new routes, Kingfisher Airlines will be operating 86 flights daily across 17 key Indian business and leisure destinations.

Commenting on the launch of these new routes, Vijay Mallya, chairman & CEO, Kingfisher Airlines said: “Through the launch of these 5 new routes Kingfisher Airlines reaffirms its commitment towards addressing the needs of its travelers by providing connectivity between major and minor cities of India.”

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INDIA is toasting its new-found affluence with wine as its rapidly growing middle class discovers the joy of the grape.
The subcontinent has long been regarded as “Kingfisher country”, a reference to a popular beer and spirits group. But the combination of an economic boom and a relaxation of import duties has seen wine consumption soar, particularly among young, well-travelled professionals.

Wine clubs are spreading throughout the country and newspaper society pages regularly feature tycoons, fashion models and Bollywood stars clinking glasses of red. Delhi, Bangalore, Mumbai, Lucknow and Hyderabad all have established clubs, while branches are opening in call centre capitals such as Chandigarh and Gurgaon, a mini-city of office towers and shopping centres in Delhi’s southern suburbs.

Last week Vijay Mallya, the boss of Kingfisher and one of the world’s wealthiest brewing billionaires, marked another stage in the country’s conversion when he bought Bouvet-Ladubay, a French sparkling wine producer.

Mallya will ship its wines to India, where they will be bottled. He will also use his new reserve of expertise to improve the quality of locally produced wine. The tycoon, who owns an airline and is regarded as India’s Richard Branson, is also considering takeover bids for two South African wineries.

“India has a huge youth population and they’re growing up with western values, willing to try new products,” he said. “They enjoy wine — especially the girls.”

According to Bhaichand Patel, a wine critic with the Hindustan Times, the country’s love of wine has grown as increasing numbers of Indians have travelled to Europe and America.

“Before there wasn’t much wine available,” Patel said. “Grovers and Sula are producing decent Indian wines and you can buy good Chilean for £6.25 a bottle. It reflects an increasing sophistication and wealth in India. Now if you go to a dinner party in Delhi, people expect wine. Even people whose parents never drank are now drinking wine.”

Until recently Indians were restricted to home-grown varieties, while wines from Europe and the New World were either unavailable or astronomically priced because of high duties.

Subhash Arora, founder of the Delhi Wine Club, said interest started growing four years ago when the government lifted some import restrictions and cut duties on wines sold in restaurants and hotels.

“It unleashed a hidden demand, not just among foreigners here, but among people who had been students overseas, and businessmen. The Indian wine makers started making cabernet sauvignon, and it took off.

“Wine has become the standard drink of fashionable parties, but it’s also popular among low-strata people who see it on television. They feel it’s glamorous,” he said.

Arora has arranged almost 100 wine-tasting evenings since his club was launched less than five years ago and specialises in pairing western varieties with Indian dishes. He said the acidity of riesling made it a natural partner for slightly spicy food, while kebabs called for a fruity shiraz or beaujolais.

The Indian government is considering allowing Oddbins-style chains to open in the shopping centres emerging throughout the main cities.

The lucrative potential of India’s taste for wine is also attracting wine-makers from Europe and California. They include Indians who have risen to the top of the industry in France, such as Ariff Jamal, chief wine-maker at Albert Bichot, Burgundy, and Raghu Sawkar, a retired surgeon who now has a successful vineyard in California’s Napa Valley.

Sawkar developed a taste for wine at departmental meetings when he was a young surgeon at Queen Elizabeth hospital in Gateshead, Tyne and Wear, in the early 1970s and later in Ohio. When he retired he studied viticulture at Napa College.

He is launching a wine bar in Bangalore and plans to buy a nearby estate to create a new wine mixing his own Napa Valley syrah grapes with Indian varieties.

“Bangalore now drinks 50,000 cases a year, Mumbai takes 100,000. It’s not huge, but it is growing fast. They have been to the UK and the US, Germany and France. They’ve tasted good wine, and they like it,” he said.

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Voters in Kingfisher County will have to decide among three candidates Tuesday when they vote for an associate judge for Judicial District 4.

Retired Assistant District Attorney E.A. “Ard” Gates and attorney Dan Stake are seeking to unseat incumbent Associate District Judge Susie Pritchett. If no candidate receives a majority of the votes, a runoff will be Aug. 22.

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Pratt & Whitney Canada Corp. has announced a five-year agreement worth $60 million US to maintain turboprop engines for Kingfisher Airlines of India.

The Montreal subsidiary of United Technologies Corp. said Tuesday at the Farnborough International Air Show that the agreement covers Mumbai-based Kingfisher’s new fleet of 35 ATR 72-500 twin-engine aircraft, manufactured by a joint venture of European Aeronautic Defence and Space Co. and Alenia Aeronautica of Italy.

Pratt & Whitney Canada said it will provide engine maintenance and accessory coverage for the fleet’s 70 PW127F engines and seven spare power plants.

The company said it will establish hot section inspection capability in India by year’s end, with major engine refurbishments focused in Singapore.

“This agreement confirms that we are the service provider of choice for the rapidly expanding fleet of P&WC engines in India,” stated Alain Bellemare, president of Pratt & Whitney Canada.

“It also underscores the increasing popularity of turboprops in India thanks to their excellent operating economics, reliability and durability.”

Shares of United Technologies fell 33 cents to $58.99 in morning trading on the New York Stock Exchange.

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Kingfisher Airlines said on Tuesday it had ordered 10 Pratt & Whitney engines to power its fleet of Airbus A330 planes in a deal worth USD 300 million and had taken an option for 10 more, reports Reuters.

Kingfisher, the brainchild of drinks tycoon, Vijay Mallya, whose UB Group makes Kingfisher beer, made the announcement at the Farnborough International Air show near London. Pratt & Whitney is a unit of United Technologies Corp.

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Liquor baron Vijay Mallya-promoted Kingfisher Airlines, one of the newest carriers to join the Indian skies, will wait for two more years before tapping the capital market as the company is presently preoccupied with finding its feet.
“As far as the public issue of Kingfisher Airlines is concerned, I will not go public in the next 1-2 years … It is doing well now and we need time to stabilise,” Mallya said addressing an analysts meet here on Sunday evening.

Kingfisher, which launched operations early last year, was originally expected to hit the capital market in the second half of 2006.

“We have adequate internal accruals to fund the necessary capital expenditure requirements till that time. I will hit the capital market once the airline gets pretty good valuation,” Mallya said.

Ruling out possibilities of acquiring any airline in the near future, he said he was looking for opportunities that will benefit him to create a major breakthrough in the Indian aviation industry.

“Presently, I am not interested in any Indian airlines. Kingfisher is doing well with over 70 per cent load factor. I expect a consolidation in the Indian aviation space over the next five years,” said Mallya, who earlier made an unsucceeful bid to takeover full-service carrier Air Sahara.

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Black Country law firm Waldrons has played a major role in the takeover of Birmingham-based Kingfisher Building Company by UK development services group Rok.
Operating across the West Midlands, Kingfisher in Hockley provides social housing for local authorities and housing associations.

Founded in 1994 by husband and wife Peter and Val Davies, the company employs more than 50 people.

All legal negotiations for Kingfisher were handled by Natalie Gennard, associate at Waldrons Commercial based at the firm’s Merry Hill head office. She said: “The owners had developed a very successful business and it was critical to them to build in a smooth transition as part of the sale.

“The arrangement sees Peter staying on as managing director until at least next spring to help ease in changes for staff.”

Rok sees the deal as strengthening its new maintenance business, based in Birmingham and Stafford.

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Liquor baron Vijay Mallya is out shopping again. And this time round, Mallya has set his sights on an US-based premium-class-only airline MAXjet Airways to fuel his dreams of taking Kingfisher Airlines international.

That’s not all. Mallya is also in talks with leading American carriers, like United and Continental, for a codeshare deal.

Mallya is in advanced talks with MAXjet for an outright acquisition - a deal that would give his Kingfisher Airlines rights to mount transatlantic flights and even operate between US and India, sources close to the development told ToI. The deal is expected to be concluded over few months.

MAXjet Airways is an all-business class, low fare transatlantic airline offering services between US and UK.

Mallya, sources said, intends to also use the MAXjet acquisition to start direct flights between US and India under the bilateral Open Sky arranement between the two nations. “Negotiations are underway and they are at an advanced stage.

If the deal comes through, Kingfisher would be able to operate international flights using the MAXjet fleet from next year and augment the operations with its own long-haul jets that join its fleet from 2008,”the sources said.

Mallya confirmed the acquisition plan but refused to divulge details about his target airline. “We are talking with four US airlines for our international acquisition and MAXjet is one of them. The talks are still at a preliminary stage and nothing has been decided so far,”he said.

The acquisition, sources said, is aimed at cruising past the Indian regulation that restricts international flights only to airlines that have a five-year domestic flight track record. The purchase is expected to be carried out through his US-based venture - Kingfisher International Airlines (KIA) - in order to meet the law of the land.

US norms do not allow foreign ownership of airlines in America. Since Mallya’s children - Sidhartha, Leana and Tanya - own a majority 75% stake in KIA as American citizens, this venture would meet the US regulation on ownership of airlines, sources said.

In the interim, the airline is in talks with leading US airlines for a code-share agreement, which will give Kingfisher the right to operate the domestic leg of international flights coming in from America.

Sources pointed out negotiations are underway with Continental Airlines and United Airlines for a code-share agreement.

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