Superstar, SpiceJet and the art of flying

The airline business in India is very much like the movie business of the South, aligned very closely to political interests

Years of compulsive movie going gives you this ability to see what’s coming. The moment Rajinikanth started doing wheelies on his bike as the villain took off in a giant balloon with the leading lady, I knew it. “Oh my god, he is going to do it,” I tell my friend. 

Two frames later, he was speeding away on a hill road as the giant balloon rose from below. And, then he let the bike go and leapt into the air. Time stops as he pierces through empty space. For a moment, embarrassment gets the better of me as I bury my face in my hands. Realising that was not helping, I started whistling and the crowd joined in. By the time we were done, Rajini (Actually a computer-generated replica with his face) had flown from the cliff on to the top of the balloon, a la Superman, and finished off the villain in pure Rajini style. 

Kalanithi Maran must be lamenting the missed opportunity as Lingaa rakes in crores at the box office, breaking records set by much younger heroes. For four years ago, the star’s previous blockbuster, Enthiran, proved to be a good investment for Maran, boosting the numbers of his listed firm Sun TV. Released in three languages, the film took in Rs 179 crore. 

Enthiran was not the only prize catch for Maran that summer. He bought the ailing Spicejet, fancying himself to be the “brave man” it takes to run an airline. He pumped in Rs 750 crore, much of it earned from his flourishing media business, to pick a 37.75% stake at Rs 47.25 a share. He made an open offer at Rs 57.76 a share. After subsequent infusions, the combined stake of Maran and his private firm KAL Airways now stands at 53.48%. At the open offer price, this is worth Rs 1,650 crore. 

Maran’s acquisition of Spicejet did a world of good for some of the neglected southern destinations like Madurai, where I come from. The sleepy non-metro airports were spiced up, so to spealk. Suddenly, direct services were plying from Mumbai and Delhi to smaller destinations in South making quick visits for weddings and funerals easier. In the initial months, the fares were really low cost. Tourism and business travel from Chennai to Colombo picked up. 

But like Lingaa, Maran too derived his strength and bravado from the deeds of a past generation. After J Jayalalithaa trounced his grand uncle Karunanidhi in the 2011 state elections, the writing was clearly on the wall for Maran’s media businesses. Hansraj Saxena, a senior Sun group executive who was looking after its flourishing movies business, was arrested in a cheating case. Crippling taxes were levied on the DTH business, even as the state government launched its own cable service breaking the spine of his media empire. 

But the budding empire in the air survived since the state government had little or no control over the skies. The promoter continued to pump money and is said to have infused over Rs 1,600 crore so far. 

It was clear when the grand-uncles DMK party drew a blank in the general elections that turbulence was ahead. Public sector banks seem to have suddenly rediscovered their prudence. The Sun group CFO who was on TV Tuesday morning described this as “a mortal fear” displayed by PSU banks for lending to airlines. The CFO categorically ruled out leveraging the media business for some glucose for the airline calling it ‘bad corporate governance’. 

Does this mean the presence of the DMK in the UPA coaltion helped the airline get public sector bank loans and credit lines from state-owned oil marketing firms generously and in time? 

Have these oxygen cylinders begun to dry in the past few months? It would seem so. Maran’s stake today is worth a little over Rs 350 crore at the current share price of Rs 13.01. He is required to give personal guarantees for working capital requirements. 

In India, the airline business is very much like the movie business in Tamil Nadu. Unlike Enthiran, Lingaa’s satellite rights were bagged by Jaya TV, and its music release was telecast on Jaya TV too. The director profusely thanked Jaya TV for all its help. For obvious reasons, Maran can’t do what the superstar did—picking a channel that suited the regime. 

Rajini also pitches himself as the benevolent king (Lingaa’s grandfather) who sacrifices everything for the masses. Which leads me to my hunch: Amma is in exile as ‘people’s CM’, her arch rivals are nursing their wounds from back-to-back electoral drubbings, and the business empire of their family members is crippled by a cash-guzzling airliner. As grounding and job losses loom large, the reputational damage is huge. 

BJP has made no secret of it being a Rajini fan. There are already animated virals of ‘Modiyappa’ that show Rajini teaching push-ups with a superhero avatar of Modi. Is the bleeding airliner a springboard for the Super Star to take another big leap in 2016? 

Oh God, should I close my eyes? Should I whistle?

(N Sundaresha Subramanian is Associate Editor at Business Standard)