Why does Indigo Airlines make a 550 Crores Net Profit this year and Kingfisher expect to lose over 1000 crores in the same year?
What creates the GAP of 1500 CRORES (300 million US$)? between 2 companies when they both fly airplanes in India and in the same financial year?
Is it the difference between running low cost, low budget airlines vs. full service luxury services with everything loaded? Or for the many zillions of reasons that immediately start coming to your mind?
NOPE.
Funnily, this is not about the the BUSINESS MODEL of Airlines.
I believe its the fundamental difference on WHO PEOPLE ARE when they begin to build something
Fundamentally, I believe that:
– Kings (Vijay Mallya) operate kingdoms – a la Business empires. They have many companies to take care of, multiple business interests and varied profit and loss centers. A business here, a venture there is of little significance.
– Gardeners (Rahul Bhatia of Indigo) have ONE Garden to manage. That’s their life for them. Its all or nothing. Their entire life and its work is concentrated on that one business or garden.
– Kings have Kings Men (managers) to do things. And we all know the quality of ownership that arises when you give external people control. (no matter how senior and responsible and fundamentally sound they may be). I have met several managers and senior resources of Kingfisher and I always shuddered to think of what they cost vs their responsibilities and authority to make decisions. And remember they are very expensive because they are replicating the King who is busy elsewhere.
– Gardeners I am sure you realize pull out the weeds themselves and water their own plants. They are one man armies because they have to START from scratch. They cannot employ fellow gardeners to work in a barren land.
– Kings are LAVISH. Look at the way Kingfisher built its brand. The pens, the liveries, the service was ROYAL. Kings know nothing less – and why should they? Kings rarely know what anything COSTS…
– Gardeners are MISERLY. They live on meagre’ness’. They grow things with their hands and with whispers and love from their hearts. They UNDERSTAND THAT MORE IS BAD – coz if you water a plant more than it deserves – it dies.
– Kings have treasuries that fund them. They don’t have to bother about anything but taxing people. In the case of Vijay Mallya – his other businesses are nothing but overflowing treasuries. So all it takes is dipping your hands into a chest of Gold and throwing the coins into buying what you want.
– Gardeners live on their PRODUCE. Imagine a Gardener getting compensated for a dead garden. Gardeners like Rahul Bhatia have to sow flowers to sell and then feed themselves.
The comparisons can go on and on.
I think I have made my point.
By happy to start as a Gardener. Coz that’s a blessing in disguise.
*****
Interesting related read – I seem to be falling in love with Indigo Airlines
Disclosure – I am fond of Vijay Mallya. He has been special for me coz
his Signature Brand featured me as a Brand Ambassador in 2003. I owe him.