This refers to ‘Flying on empty’ (August 6). The author has shattered the halo formed around people like Vijay Mallya who wanted us to believe that a costly airline would still make money and that customers wouldn’t mind paying more as long as the cutlery was of a particular type. This may be true of a certain class of people, but is not true of most people.
Predictably, Mallya’s airline is in a big soup and that is why he wanted a bailout. As has been pointed out, the culprit behind the losses was not the high price of aviation fuel but the poor business model.
It has to be pointed out, at the same time, that the low- cost model hasn’t fully succeeded either. The reason why Captain Gopinath had to sell his airline (to Mallya!) was because the pioneer of low-cost aviation in the country was not able to make it work either. It is true SpiceJet has made profits in the last quarter while others have lost money, but it was also losing money till some time ago. We have yet to see if it is able to sustain these profits and also expand at a meaningful pace.
You were right in being sceptical about the Mallya model, but let’s not accept that the low-cost model will work just because it offers low fares — low cost and low fares are two different things. Captain Gopinath discovered that the hard way. Will SpiceJet go the same way?
Anand Gupta, Gurgaon
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