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cover story: Kalanithi Maran
Is The Sun Setting On Maran’s Empire?
Time is running out for Kalanithi Maran’s once-invincible empire as the broadcasting and airline businesses lose their mojo
COMMENTS PRINT

In early July 2013, advertisers and media planners across the country received a bewildering missive from one of the biggest television players in south India — a statement from Sun TV that said the channel was hiking its ad rates for a 10-second spot from a little over Rs 30,000 to a whopping Rs 2 lakh. This bit of arrogance from the Kalanithi Maran-owned broadcasting network was thought to have emerged in response to a recent government regulation favouring a 10-minute cap on advertisements (plus two minutes of promos) for every hour of television programming, against 20 minutes earlier. Since the new cap translated into a significant hit on revenue, Sun TV, which has managed to hold viewers’ attention for over two decades now, decided it would be easier to hike ad rates instead of implementing calibrated increases like other broadcasters. This was not the first time the channel had taken such a bold decision — given its dominant position (see: Rising high and fast), Sun TV had, in the past, dictated price increases even during times of a slowdown. But this time around, the script was a little different — an immediate uproar ensued from the advertisers’ quarters, forcing Sun TV to revoke the change within a fortnight.   

In many ways, this is a reflection of how the broadcasting scenario has changed in Tamil Nadu, a state that brings in as much as Rs 1,500 crore of television advertising revenue each year, 10% of the national pie of around Rs 16,000-17,000 crore. From being in a position of clear dominance across genres in the state, Sun is facing a tough time from competitors, who are not just airing programmes with good content but are more amenable when it comes to dealing with advertisers. If that was not bad enough, the Sun network is facing the heat in markets such as Andhra Pradesh and Kerala as well, ceding its numero uno position to channels that entered the market much later.

 
 
SCV makes Rs 3 crore each month as cable subscription revenue, against the Rs 14 crore it used to make prior to Arasu’s launch
 
 
Unfortunately, broadcasting is not the only beleaguered arm of 50-year-old Sun Network executive chairman Kalanithi Maran’s vast business empire. Maran’s aviation business — a sector he entered four years ago — is deep in the red. Worse, the political patronage that Maran enjoys courtesy his proximity to the DMK is also the cause for some serious heartburn. The change of government in Tamil Nadu since 2011 has only complicated affairs for the man often referred to as the media baron of the south. Besides, younger brother Dayanidhi’s alleged involvement in the 2G spectrum scam during his term as telecom minister in the central government and the subsequent investment by a Malaysian-based telecommunications company in Sun Direct (Maran’s DTH venture) was the last straw. There is very little to suggest that Maran, who, along with his wife — and Sun TV’s executive director — Kavery, took home Rs 120 crore as remuneration in FY14 (nearly 18% of Sun TV’s profits last year) and boasts of a $2-billion net worth, can revive the fortunes of his businesses. In fact, there is a real and present danger of the sun setting on Maran, who did not respond to a detailed questionnaire from Outlook Business for this story.

Sunrise Sector

Launched by Maran in 1993, Sun TV proliferated and thrived under the erstwhile DMK regime, which oversaw the distribution of 1.62 crore TV sets free of cost across Tamil Nadu — a state with a population of 7.2 crore — at a cost of Rs 4,000 crore to the exchequer, till it was ousted by the J Jayalalithaa-led AIADMK in the 2011 polls. Grand nephew of DMK chief M Karunanidhi, Kalanithi, along with brother Dayanidhi, used politics to expand his media and telecom businesses, which got a shot in the arm during the period when the DMK was part of the erstwhile UPA coalition at the Centre. Not surprising, then, that with complete control over content and distribution, the Maran-owned multi-system operator Sumangali Cable Vision (SCV) enjoyed a near monopoly in cable distribution services in Tamil Nadu and the 33 TV channel-strong Sun TV network grew at a healthy clip over the years (see: Rising high and fast). But the fairytale script went awry when the AIADMK government set up Arasu Cable Corporation as the official cable distributor in the state in September 2011, simultaneously imposing a heavy tax on DTH operators.

 
 
"Earlier, it was impossible for non-Sun Network channels to gain a position of significance in Tamil Nadu"P Sakilan, president, Thamizhaga Cable Operators Welfare Association
 
 
SCV was Maran’s trump card, as it made him king of the distribution business — it not just ensured that Maran’s bouquet of channels, led by Sun TV, would be available on the prime band (slots with a limited number of frequencies that command the highest premium), but also allowed him to have a stranglehold on competition. A monopoly on cable distribution meant that SCV would decide if competing channels were to be aired in the state at all, translating into high television rating points (TRPs) for Sun TV and other network channels, making them almost indispensable to the advertiser. But Arasu Cable changed that by charging viewers just Rs 70 against the average Rs 100 that SCV subscribers were paying. “That was the first sign of trouble for SCV. Things are much better now,” says P Sakilan, president, Thamizhaga Cable Operators Welfare Association. Today, from its earlier position of absolute monopoly, SCV accounts for just 10 lakh of the 30 lakh cable-owning homes in Chennai. Tamil Nadu Cable Communication, an entity set up by a bunch of local cable operators (LCOs) in the city, accounts for a much larger 15 lakh, while the rest comes from smaller cable operators. Of the 80 lakh connections at the state level, Arasu currently accounts for as many as 70 lakh subscribers, from 4.94 lakh in 2011.

“Earlier, it was impossible for non-Sun Network channels to gain a position of significance in Tamil Nadu. We were just bullied by them as they controlled everything,” says Sakilan. He claims that this September alone, nearly five lakh users have moved from SCV to Arasu. Ironically, it was the DMK government that had taken the initiative of setting up Arasu TV after a disagreement within the family. Things took a turn for the worse as Sun TV was not aired by Arasu for nearly a year from its September 2011 launch. The two parties reached an agreement in August 2012, whereby Arasu would pay Sun Rs 5 per month to air its channels but would make its channels free to air in Chennai. This one-year arrangement expired in August last year, but Arasu continues to pay the network as per the older tariff. Sakilan estimates that SCV makes Rs 3 crore each month as cable subscription revenue, against the Rs 13.5 crore it used to make before Arasu’s launch.

Channel owners, too, are a relieved bunch. According to PV Kalyanasundaram, managing director of Polimer TV, a general entertainment channel (GEC) that was launched in September 2009, it was a struggle to get the channel aired on SCV for a very long time. “It was a very frustrating period and we would have had to shut shop had the DMK returned to power in 2011,” he says. Today, Polimer also runs a 24x7 news channel and a Kannada music channel. “Sun and SCV used to decide what viewers would watch. It was impossible to do business back then without facing threats,” adds Kalyanasundaram. The second telling blow for Sun Network came when the Jayalalithaa government imposed a 30% tax on DTH operators, which, in one stroke, made Maran’s Sun Direct extremely vulnerable. “The DTH business is almost unviable in Tamil Nadu,” says Jawahar Goel, managing director, Dish TV, the country’s largest satellite television provider. Pointing out that Tamil Nadu and Uttar Pradesh (which levies a 33% entertainment tax) are the most difficult markets when it comes to cable distribution, Goel adds, “The political undercurrents in Tamil Nadu and the high taxation in Uttar Pradesh make DTH a very expensive business proposition.”

 
 
"Sun and SCV used to decide what viewers would watch. It was impossible to do business back then without facing threats"PV Kalyanasundaram, MD, Polimer TV
 
 
With 10 lakh DTH connections, Chennai is a tough DTH market, of which Sun Direct enjoys a 30% share. While the Marans hold an 80% stake in Sun Direct, the balance is held by Malaysia’s Astro Group. When it comes to political and business advantages, there appears to be no limit to the benefits the Sun Network has received, especially given that Dayanidhi was in charge of the telecom ministry. This is most evident in the company’s dealings with Malaysia’s Maxis Communications. The $2.7 billion integrated communications group was keen on gaining a foothold in India’s telecom story. In 2005, Dayanidhi coerced C Sivasankaran, the serial entrepreneur who owned cellular services company Aircel, into selling his operations to Maxis.

A CBI chargesheet filed in late August reportedly states that Dayanidhi received a Rs 742-crore bribe from Maxis for this deal. Of this, it has been reported that Rs 549 crore (Rs 629 crore in all, including some investments) was paid by Maxis through its subsidiary Astro All Asia Network as an investment in Sun Direct. This deal was struck at Rs 69.75 per share for a 20% stake in the DTH project. In addition to this, two other Maxis subsidiaries, South Asia Multimedia Technologies and South Asia Software Technologies, invested Rs 193 crore in South Asia FM, a Chennai-based company owned by the Maran brothers. In turn, Maxis was awarded licences for expanding services, which later were discovered to have led to the 2G spectrum scam. The investigation also revealed that Sivasankaran was not given licences to expand Aircel’s operations and was instead forced to sell out to Maxis.

While the law has taken its course in the telecom case, market dynamics are at work in case of the DTH business. “Low average revenue per user (ARPU) levels and most channels being aired for free are huge challenges for people like us,” points out Goel. In other words, Sun Direct has a long way to go before it breaks even, given that it has over Rs 900 crore debt on its books and a high per-subscriber acquisition cost of around Rs 2,400, versus Rs 1,996 for rival Dish TV. Incidentally, Sun Direct was reportedly looking at a merger with Reliance Digital TV, which would have helped it expand in markets outside the southern region, but talks fell through last year.

Losing Clout

Rival broadcasters who have met Maran or done business with him credit him with a razor-sharp mind and a thirst to dominate every market that he enters. “However, that works only when there are two players, with Sun or one of its network channels being one of them. The moment he encounters serious competition, the situation becomes tricky,” says an executive at a rival channel in Tamil Nadu. Much of that vulnerability is today on display in Kerala and Andhra Pradesh, where Sun started off as being the most watched network, before being hit badly. According to Peter Mukerjea, ex-CEO, Star TV, there was always an unwritten agreement between Sun and large players such as Star. “It was about us not entering the south and Maran not making a foray into the north,” he says. But that unwritten commandment fell apart when Star entered the south by acquiring a stake in Vijay TV in mid-2004. “Tamil Nadu was too big a market to ignore and we had to be there. We managed to do well in the Hindi market and the south was the next step,” says Mukerjea. It was when he was working on this deal that Mukerjea ran into Maran on a visit to Chennai. The latter who, by then, was a big boy in broadcasting and distribution in Tamil Nadu, discouraged Mukerjea from going forward with the acquisition. “Do not expect me to support you. You will never get the prime band on my distribution network”, is what he told Mukerjea. Narrating this story, Mukerjea admits that he was a little surprised by the remark but decided to go ahead with the deal. Interestingly, in 1995, Star TV had received an offer to buy over Sun TV for $9 million. “But we were still an English network and wanted to first get it right in the Hindi market before looking elsewhere,” he says.

Today, with a proliferation of channels across genres and languages, the average TV viewer is spoilt for choice. Though Sun TV runs 33 channels in the four south Indian languages, this is just a fraction of the over 200 channels in the southern market. That said, Tamil Nadu is still Sun TV’s bastion, as it accounts for Rs 700 crore of the total state television advertising revenue of Rs 1,500 crore, giving Maran an enviable share of the market, at almost 47%. Sun’s closest competitor in Tamil Nadu, Star’s Vijay TV, earns advertising revenue of just Rs 100 crore. But with more channels entering the Tamil Nadu market, Sun will find it hard to retain its clout.

Soap Opera

From 20 channels in 2004, Tamil Nadu now boasts of over 60 channels across segments such as general entertainment, news, music, kids, comedy, movies, devotional and knowledge. “A large network is not the epicentre for an advertiser anymore. More channels clearly allow for differentiated viewership clusters,” points out Narendra Alambara, COO, Sovereign Media Marketing, the marketing arm of the Thanthi Group, which runs a television channel in the state, in addition to being a big player in publishing.

The marketing head of a rival channel points out that big advertisers such as HUL, P&G, ITC and M&M are spreading their money across channels. According to B Shankar, CEO, Fourth Dimension, which handles the advertising sales for Puthiya Thalaimurai TV, a news channel launched in August 2011, there was an opportunity for a news channel with a neutral positioning. His channel is the most watched in the state, leaving Sun News behind, and it has attracted advertisers such as Vini Cosmetics and P&G. “These companies never looked beyond GECs but we managed to get them on board,” he says. Today, Puthiya Thalaimurai charges Rs 1,000-1,200 for a 10-second spot, against Sun News, which charges Rs 750-800.

 
 
With corporates tightening their budgets following the slowdown, ad spend in tn has risen by just 7-8% since 2009
 
 
It’s not just his news channels that are a cause for worry for Maran, who is said to be spending more time outside India now, in locations such as Mauritius, London and Finland. Competition is now on its way from other states in the South, specifically, Andhra Pradesh and Kerala. Till late last year, Gemini TV, a part of Sun’s network, was the most viewed channel in Andhra Pradesh, with MAA TV breathing down its neck. Today, MAA TV is the clear market leader with 565 GRPs (gross rating points, which is the sum of all rating points for an advertising schedule, normally calculated on a weekly basis) across the state, with Zee Telugu at 517. Now, however, Gemini has been pushed to the third spot, with a measly 464 GRPs. “Our focus in on soaps, though Telugu blockbuster movies have really swung things in our favour,” says a senior official at MAA TV.

This is an interesting detail, since Sun TV and its network have so far successfully depended on soaps to rake in advertising revenue. For a long time, Sun TV would air the same soaps across channels, first made in Tamil and then dubbed in other south Indian languages. That worked as long as there were just a handful of channels in the business. With the proliferation in channels, the audience was looking for something different, and it was not just soaps. According to the MAA TV official, his channel took the events route by airing cricket matches featuring movie stars, film awards and even audio launches. In a film-crazy state like Andhra Pradesh, this worked remarkably well. MAA TV did not take its eyes off soaps either, and in the recent past has aired dubbed versions of popular Hindi shows such as Balika Vadhu and Diya Aur Baati Hum. All this has translated into higher viewership for MAA TV and channels such as Zee Telugu (which is investing time and money in this state), bringing in Rs 500 crore of advertising revenue every year. The extent of the crisis at Gemini TV is evident in the fact that it has reduced its advertising rates from Rs 25,000 for a 10-second slot on prime time by over half to just Rs 10,000. MAA TV charges Rs 15,000 for a 10-second spot, which, according to the MAA TV official, has not deterred brands such as HUL and P&G from spending more. “When we were in the second position, these companies never allocated more than 15% of their budget on MAA TV, while 40% was allotted to the Gemini network. Today, we take home at least 30% and Gemini accounts for 15-20%,” adds the official.

 
 
"We had an unwritten agreement with Sun about Star not entering the South and Maran not making a foray into the NorthPeter Mukerjea, former CEO, Star TV
 
 
In many ways, large and enthusiastic sales teams (60 members in case of MAA TV) have helped these channels along, while Sun, across its network, has no more than a dozen employees. While channels such as MAA TV — or even Zee Telugu — have offices across most major cities, a company looking to advertise on Gemini will need to reach out to the Sun TV office in Chennai. A former Sun TV executive says the broadcasting business is largely run by Maran’s wife, Kavery, and his daughter, Kaviya. “The employees know very little about what is going on. It is a company without a sense of direction,” he says. The case of Sun network’s Surya TV in Kerala is quite similar to Gemini. Here, its big competitors — Asianet and Mazhavil Manorama — have pushed Surya to the third position. Asianet had 1,227 GRPs this mid-September and Mazhavil Manorama stood at 346, while Surya’s tally, at 340 GRPs, has remained unchanged from where it was at the beginning of the year.

Besides, with corporates tightening their budgets following the slowdown, advertising spend has increased by just 7-8% in Tamil Nadu since 2009. “It was as high as 15-17% between 2004 and 2009,” points out Alambara. And there is very little to suggest that this story will change in Sun’s favour in the foreseeable future, with advertisers in key categories such as retail, FMCG, jewellery and real estate reducing their spend. The Rs 10,000-crore jewellery group Joyalukkas has slashed its advertising budget to 2% of sales, compared with 3% last year. “Growth has been hard to come by and advertising on television is very expensive today. We restrict ourselves to just the top channel today to get maximum benefits,” mentions chairman and managing director Joy Alukkas. The brand spends most of its money on Asianet in Kerala. The fact that Sun TV rolled back its audacious hike in advertising rates and has not managed to raise rates from 2011 levels (around Rs 30,000 for a 10-second spot) underscores the challenge it faces. Not surprising, then, that advertising revenue growth has been a challenge over the past three fiscal years. In fact, rival broadcasters insist that Sun is offering at least a 10% discount on its 2011 rates. It’s not just broadcasting where Maran is losing clout: his attempt to gain a stranglehold in the movie business is unraveling, and very quickly at that.

Flop Show

Though none of Tamil Nadu’s film producer bigwigs are willing to go on record, it is clear that they can now release their films without fear. If that sounds hard to believe, one just has to go back to the period starting from 2006 to 2011, which was marked by the domination (though producers call it high-handedness) of Sun Pictures, a division of Sun TV. Simply put, no film in Tamil Nadu could be released without Sun Pictures taking a slice of it, either as a distributor or by acquiring the film for a throwaway price and then make a killing by selling its rights.

 
 
"Political undercurrents in Tamil Nadu and high taxation in Uttar Pradesh make DTH a very expensive business proposition"Jawahar Goel, MD, Dish TV
 
 
A well-known producer talks about how he was looking to sell distribution rights for his Rs 15-crore film from 2009, when it was completed. “One of our distributors called me to say he would buy the rights for Tuticorin and we agreed upon a price. He said he would come the following morning with the cheque,” says the producer. The distributor never showed up and repeated calls to him were futile. Eventually, this producer, after claiming to having been threatened by Sun Pictures, was forced to sell his film — including distribution, theatrical and satellite rights — for a sum of only Rs 12 crore. “The film turned out to be a huge hit eventually,” says the visibly infuriated producer.

This business model of Sun Pictures, an entity founded in 2000, gained ground after the DMK stormed back to power in 2006, ensuring that the money just kept coming in. This was most evident in the case of Enthiran (Robot in Hindi), a highly-publicised film starring Rajinikanth and Aishwarya Rai, which was released in October 2010. Made on a budget of over Rs 130 crore, this film was produced and distributed by Sun Pictures. The success of the project was evident in the third-quarter numbers of Sun TV, which came out in the last week of January 2011. Total income for the company increased by over 50% to cross Rs 600 crore (it was Rs 403 crore for the same quarter of FY11), while net profit was up 48% at Rs 225 crore; this translated to a net profit margin of an impressive 37.5%. As for Enthiran, which was dubbed in other south Indian languages as well, it grossed revenues of Rs 179 crore, in addition to another Rs 15 crore towards the sale of satellite rights. It was broadly expected that Sun Pictures would continue to produce more films and rake in the moolah. What Maran had not accounted for was the impending assembly elections in the state and the mood of the voters.

AIADMK’s victory also saw Maran’s one-time right hand man and buddy from college, Hansraj Saxena, then COO of Sun Pictures, land behind bars that year on charges of cheating and intimidation. This was after TS Selvaraj, a distributor from Salem, had lodged a complaint that Sun Pictures had sold him the rights of Theerada Vilayattu Pillai for Rs 1.25 crore. Saxena, however, had chosen to release the film directly in local theatres. When Selvaraj demanded a sum of Rs 90 lakh from Saxena, the latter first delayed payment and then is said to have threatened Selvaraj. Saxena, who has fallen out with Maran, recently admitted that BSNL lines were misused to transmit signals of Sun Network-owned television channels through a telephone exchange, with 323 high-speed telephone lines set up in Dayanidhi Maran’s house in Chennai in 2006, while he was the telecom minister. This is said to have caused huge losses to the state-owned BSNL.

 
 
Sun TV has not managed to raise advertising rates from the 2011 levels of around Rs 30,000 for a 10-second spot
 
 
Saxena, who was vice-president (programming) of Sun TV at the time, was questioned by the CBI in June this year in Delhi and then in Chennai. “Yes, I am aware that the lines were used by our technical team at Sun. This is the truth and I will not hold back any information from the CBI,” Saxena revealed to Outlook Business. Though Saxena declines to speak about other crucial details of his tenure and the status of his relationship with Maran, it is common knowledge that all is not well between the two men. While they met as students at Chennai’s Loyola College, Maran then went to the University of Scranton, a private institution in the US, for his MBA. After returning to India in 1987, he worked for Kungumam, a magazine that his family owned. His tryst with television followed a couple of years later, when he started Poomalai, a monthly video news magazine. Sun TV followed in 1993.

On the movie front, however, Enthiran was the last film that Sun Pictures produced. “Sun Pictures has shut down for all practical purposes, barring a few films that are being distributed. Things are back to normal in the Tamil film industry now,” says the aforementioned producer with a smile. Its fallout is visible in the network’s revenues from the movie business.

Trouble Up High

In mid-2010, Kalanithi Maran surprised India Inc by buying a 37.75% stake in the-then profitable SpiceJet from Wilbur Ross, a well-known US-based investor, and Bhupendra Kansagra, an NRI, for Rs 940 crore. Till date, including the cost of acquisition, Maran has pumped in Rs 1,400 crore in the low-cost carrier. In a media interaction at the time of purchase, Maran had said, “All my steps are calculated, I am not going blindly with intuition. I never wanted to do it when oil prices were at $140 per barrel.”

 
 
Sun pictures has shut down for all practical purposes, barring a few films that are being distributed
 
 
While Maran may have thought he was the smartest cookie in the transaction, it’s the investors who proved to be wise. When Maran bought the airline in FY10, SpiceJet was making operating margins of 19%. He sounded cocky when he said in an interview, “We picked up one company that is making profits. So it disproves the theory that it’s [aviation] a loss-making industry.” What Maran hadn’t factored in was that even if oil prices stayed benign, there were other variables — such as intense competition, a weak rupee and increasing infrastructure/maintenance costs — over which he had no control. Since then, though SpiceJet has managed to create a name for itself as a low-cost carrier, growth has come at a huge cost. As on date, SpiceJet is deep in the red, with accumulated losses of over Rs 1,000 crore and debt of over Rs 1,500 crore, which has wiped out its net worth, as the airline posted its third straight annual loss in FY14. At Rs 47.25 a share in 2010, Maran possibly thought he had got SpiceJet at a good price. “We got 25% less than the market price, so it has to be right. The pricing that I did was the correct price,” Maran had quipped. Since then, the price has plummeted to Rs 13, a good 72% lower.

According to industry sources, a big reason for SpiceJet’s woes is that Maran chose to run the airline just the way he operated the broadcasting business — in a monopolistic fashion. “He took things for granted, just like what he did with Sun. In a sector as dynamic as aviation, which had several well-entrenched players, Maran did not really take competition seriously,” says an industry veteran.

 
 
"I am aware that the (BSNLl) lines were used by our technical team at Sun. I will not hold back any information from the CBI"Hansraj Saxena, former VP, programming, Sun TV
 
 
Before Maran took over SpiceJet, almost 2% of the airline’s revenue was spent in communication and brand-building. For three years (FY11 to FY13), next to nothing was spent towards this initiative. More importantly, Maran erred in letting Indigo gain the upper hand. For example, for the key Mumbai-Delhi route, which brings in 10% of the total passenger traffic, SpiceJet operated six flights in 2010, while Indigo operated eight. But the game swung in Indigo’s favour when Kingfisher ceased operations in October 2012. Today, Indigo operates 14 flights a day on the sector, while SpiceJet is a distant third, with seven flights. “The advantage of having so many flights each day for Indigo is that even if SpiceJet reduces fares on this route, it can do so only on seven flights. Indigo just needs to match it for flights in the same time band and can still make money on the rest,” says the industry source.

Further, since it placed big orders, Indigo’s ability to negotiate on the sale-leaseback model was greater, as against SpiceJet, which placed smaller orders that offered it no bargaining power. Also, while SpiceJet never got its domestic strategy right, it bungled up on its overseas foray as well. Instead of focusing on smaller and lesser-known destinations, it chose to fly to destinations such as Dubai, where it was not just up against homegrown Indigo and Jet, but also the big boys such as Emirates.

And things are only getting worse. Though the airline is restructuring its network and fleet along with capacity rationalisation, which entails early aircraft lease termination, it reported a net loss of Rs 124 crore for the first quarter of FY15. Even as its passenger load factor has come down from 80% in FY13 to 69% by FY14, the DGCA has now sought a special safety audit of the airline to assess whether it is fit to fly.

 
 
"If the problem was with the low-cost carrier model, how is it possible that someone like Indigo can run a successful business?"Captain GR Gopinath, founder, Air Deccan
 
 
According to a report in January by Sydney-based consultancy CAPA Center for Aviation, SpiceJet will require fund infusion of around $200 million to remain operationally viable, while a “realistic and meaningful turnaround” may require $300 million or more. Though the promoters are infusing Rs 200 crore into the airline at present, it will not be enough to keep it afloat. In a recent media interaction, on being asked whether SpiceJet risks becoming the next Kingfisher in the absence of a strategic investor, SL Narayanan, the chief financial officer of the parent Sun Group, replied, “Only time will tell who is right.”

Captain GR Gopinath, founder of Air Deccan, which was taken over by the now-defunct Kingfisher Airlines, is categorical when he says that the problem is not with the low-cost carrier (LCC) model. “If that was true, how is it possible that someone like Indigo can run a successful business,” he questions. Analysts say that much of Indigo’s success comes from being consistently on time, a tight control on costs and a sound sale-and-lease back model.

Given that Maran is known to take all big and routine decisions, it never really mattered who was the CEO at the broadcasting or the airline business. “I create trends,” Maran had remarked when he bought SpiceJet. For now, the “trend” doesn’t seem to be going in his favour.

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