Shut down, Kingfisher, till issues are resolved

“India’s tax authorities have once again frozen the bank accounts of Kingfisher Airlines Ltd., due to the cash-strapped airline’s inability to clear its unpaid service taxes. “We confirm that our bank accounts were attached by the tax authorities,” the airline said in a statement late Saturday. “We have resolved issues before and will do so again,” it added,” says Wall Street Journal.

This is becoming the norm rather than the exception - passengers are never confident that a flight that they have booked on will, indeed, take off. If the weekend was a nightmare for those who booked ( only 78 out of 138 scheduled flights operated on Sunday), the account being attached seems to have resulted in more pain for the airline and the passengers this morning.

[caption id=“attachment_218534” align=“alignleft” width=“380” caption=“Habitual, unannounced cancellations lead to the consumer losing trust and faith in the airline - even if the potential consumer has not personally experienced the failure in service.”]  [/caption]

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“The trouble for the Kingfisher Airlines failed to end on Monday as 16 more flights were cancelled in Mumbai and Bangalore while two others were rescheduled in the morning. This came a day after as many as 28 flights were cancelled on Sunday,” ibnlive reported early this morning.

The immediate impact of this ‘habit’ of unannounced cancellations is that bookings for flights in the future will dry up, as potential passengers do not want to take a risk on their plans going awry thanks to such incidents.

That’s why it is difficult to understand why the airline, however cash-strapped it is, is failing to deal with the situation better. The airline business is not like the alcohol business when it comes to lack of availability. If a Kingfisher beer consumer goes to a bar and finds Kingfisher unavailable, there is only irritation - and that, too, for the short term. The consumer does not ‘suffer’ as a result of non-availability; he or she will go back to the favourite tipple once it is available.

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It’s not the same with the airline; the consumer does suffer as a result of cancellations and delays. Cancellations can result in loss of business, embarrassment caused by the cancellations of important meetings, cargo being undelivered, brides and grooms unable to reach their own ceremonies, husbands being absent at deliveries of their children, connecting flights missed, and so on.

Habitual, unannounced cancellations lead to the consumer losing trust and faith in the airline - even if the potential consumer has not personally experienced the failure in service. So it is not only the passengers booked on the cancelled flights who mistrust the airline - it is virtually every single airline passenger.

It might be better, from a long-term brand (and business) perspective for Kingfisher to suspend all operations till such time as they resolve their cash-flow and debt issues. Fliers are, understandably, reluctant to fly in this air of uncertainty, which means that flights which are indeed operated will take off with a handful of passengers, resulting in further losses. The lack of confidence also means that there will be no advance bookings, so there is no cash-flow advantage being gained. Finally, the suspension of operations results in no new cases of failure of service as far as passengers are concerned - this would help arrest the damage to the brand, which is already considerable - and would limit it to the damage already done.