Exclusive interview - Dr Vijay Mallya of Kingfisher Airlines 17 Jul 2007
Kingfisher Airlines may have only recently celebrated its second anniversary, but Indias biggest domestic airline already has a breathtaking track record. In the last 24 months it has won several awards for excellence, placed orders for over 40 new Airbus planes - including five A380 super jumbos - and become a Formula One sponsor with the Toyota team.
Obviously speed is a common denominator, but Dr Vijay Mallya, Chairman and CEO of Kingfisher Airlines, wants to go further - he wants to make the business global, with the help of Formula One racings global platform
Q: Your multi-billion dollar aircraft orders indicate that Kingfisher Airlines ambitions have outgrown the skies over India. Is your Formula One involvement an accompanying measure for your expansion plans?
Dr Vijay Mallya: The large aircraft orders are reflective of the huge growth potential in India. A very small percentage of our population actually flies today, but this will grow as the economy grows between nine and 10 percent every year. We have a huge consumer class in India that equals that of the United States or Europe. These people can afford to fly, they are big spenders, and increasingly want to live western life styles. This target audience is not just for my airline, those are the people who are also potentially interested in Formula One. This brings us straight to my commitment to Formula One: we all recognize that Formula One has the largest exposure in the world. Not like the soccer world cup or the Olympics that come once every four years. Here we have a championship with 17 events that are well placed around the globe, and certainly my target audience is watching. So it is a perfect platform to inform the world that Kingfisher Airlines exists!
Q: Big Indian companies have traditionally focused largely on their domestic market, with no real history of global sponsorship. Are you treading a new path that will allow others to follow your footprints?
VM: True, Indian companies have focused largely on the domestic market, and there is a big logic in this: China is an export-oriented economy with a small domestic demand - India is the other way around. We have a huge and growing domestic economy with a 20 to 40 percent growth rate. But there are also now Indians who acquire companies overseas. India was a low cost economy where cost savings were achieved by outsourcing. Now India has many competitive skills and when we Indians acquire overseas companies it is not only for cost cutting reasons but because we can improve the operating performance of those companies, and can look what potential market could be in India itself. Regarding sponsorship, this is not only a question of sponsorship but the whole attitude towards marketing and advertising. Marketing and advertising as it is understood in the western world is mainly exercised by multinational companies operating in India. But now Indian companies understand that if they want to compete with multinationals and their aggressive marketing methods, they need to become marketing savvy. And in the process of becoming marketing savvy I can see a lot of Indian companies getting ready for global sponsorship.
Q: The involvement with Formula One racing is a demonstration of technical competence. Was that a reason why you linked it to Kingfisher Airlines and not Kingfisher beer?
VM: True, it is a demonstration of technical competence, but I dont think it begins and ends there. Historically the biggest advertisers on Formula One cars were tobacco companies. Now clearly there is no real correlation between technical competence and smoking. My point is that most countries are banning tobacco as well as alcohol advertising and we did not want to get involved in anything that could be potentially controversial. On the other hand, there is a need to make the world aware of Kingfisher Airlines because we target to become an international brand by expanding our network over the next five to10 years and therefore Formula One was considered the appropriate platform.
Q: How long did it take you to decide to participate in Formula One once it became clear that you were looking for a global platform?
VM: Not very long. I have participated in Formula One with the Benetton team in the 90s. I have a basic interest in Formula One. I am the chairman of the local FIA for the past 20 years so motorsport is second nature to me. I follow Formula One closely so nobody needed to tell me about the enormous benefits of publicity that come out of Formula One sponsorships.
Q: Did you evaluate other options?
VM: We did, but for something that will give you that kind of global exposure, Formula One is unique in itself. It is a global sport and the television viewer-ship is truly international. If you want to reach out for the globe, Formula One is the only solution.
Q: How did you arrive at the decision to partner with the Toyota team?
VM: They have the same colours: red and white. But lets be serious: I visited the Toyota Formula One factory in Cologne and was very impressed. I am convinced that they have huge human, technical and financial resources. It is a question of bringing it all together in a synchronized manner and I have every confidence that Toyota will be one of the top three teams in the world. Thats why I have decided to support Toyota.
Q: Formula One racing is a sport, but it is also about entertainment and lifestyle. You position your airline as an event-carrier - what are your plans for leveraging your Formula One involvement?
VM: Clearly it is lifestyle. Look at the glamour around the type of people who are involved in Formula One, the people who visit Formula One races and Formula One related events, the huge media turnout - one could say it is the pinnacle of the fast life. Those qualities fit perfectly with my philosophy of an airline. An airline to me is not about cheap tickets, but about enjoying flying. I want to go back to the days when travel was a luxury. I dont want to see it as a very basic transportation industry, ignoring completely the comfort of the passengers. Thats why at Kingfisher Airlines we call all those who fly with us guests. We want them to enjoy the Kingfisher experience - and that fits very well with the attitude of Formula One.
Q: Indias vast market is on many peoples wish list for the Formula One calendar. Is India ready for a Grand Prix?
VM: I am passionate about bringing Formula One to India. We have seen that the interest and viewer-ship in Formula One has been going up substantially, especially among young people with good incomes. And given the shear size of India and its booming economy it should be on the Formula One calendar. I am pushing all I can to make sure that, if not in 2009, that India can host a race in 2010.