Kingfisher Airlines: Quotes, News

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United Breweries: Quotes, News

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Iacocca famously revived the ailing Chrysler Corporation in the 1980s and Mallya is trying the same with Kingfisher. Now if Iacocca's advise is something to go by, Mallya is holding onto the old, which has not got any better.

Reports have been emerging even stronger that he might sell his stake in United Breweries to keep Kingfisher Airborne. The question now is why would he want to sell his stake in a cash cow and dump the money in a bottomless pit (Kingfisher Airlines).

Why would he want a business that brings him down on his knees imploring employees to fly or pleading with the government to reduce taxes? Why would he want to have a business that makes him skip a heartbeat everytime crude prices rise? Why would he want to run a business that has maligned him so badly, that tweets with great rhetorics go around? In fact, one tweet read, “Not sure if Kingfisher has taken off, the calendar sure has”.

If past track record is any indication of future performance, then it's almost certain that Kingfisher Airlines would never revive. This is why the Damanias, the Khemkas, the Modis, Captain Gopinath, Uday Nag sold their airlines business. Bhatia is running Indigo well, but there are reports that he sells and than leases back his aircrafts to remain profitable.

In any case, United Breweries is a cash cow and according to the BSE website made a profit of Rs 148 crores in 2010-2011. Going by the company's quarterly figures until December 2011, it might end up with slightly lower profitability figures for 2011-2012.

Now United Breweries was acquired by Vithal Mallya sometime in 1946-47 and nurtured all the way. Now, if Mallya takes Iacocca's advise then he must hold onto the old as long as its good, which means he should hold onto UB and sell Kingfisher Airlines. Selling a stake in UB would also mean ceding to management control of the company his father built over several decades.

The best option is to find a suitor like Reliance Industries. Reports suggest that Reliance may pick a stake in Kingfisher Airlines and that's just music to the ear's of Kingfisher Airlines. After all Reliance can endlessly pump money into Kingfisher given that it is likely to have cash pile of a staggering Rs 125,000 crores, according to news reports.

The Reliance option is the best option, and it means a return to good times for Mallya, with a pleasant feeling of “good riddance to bad rubbish”.

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