The problem for Mallya might not be the design of his new planes, but the
quantity he’s ordered. According to Chris Tarry, a consultant and adviser on
the aviation industry, the number of orders shows tremendous ambition, but
the issue is how many of those will actually be delivered. (Mallya has
already deferred delivery on 32 Airbus A320 jets and downsized other orders
to smaller planes.) Given the current economic downturn, Tarry agrees that,
to a certain extent, Mallya’s international plans have been overtaken by
events.
“I don’t know whether he said his business would make a profit, but the time
for it to break even is further and further to the right. But he’s not
alone… The rules of economics apply to the aviation industry just like
everything else. The debate in airlines in the sub-continent is usually the
same – there’s great potential, but far too much capacity [competition] to
make any money.”
But it’s booze, not planes, that are the foundations of the Mallya family
business. Founded by his father and inherited by Mallya at the age of 26,
after Mallya senior’s untimely death from a heart attack, the UB Group is a
£4 billion behemoth built around beer and, more recently, whisky. When
Mallya inherited, he set about restructuring it, selling off 22 divisions,
from petrochemicals to plastics, foods, mechanical equipment and car
batteries. The core business became spirits, beer, fertilisers, engineering
and IT. “That,” he says with satisfaction, “is a far tighter ship than I
inherited.”
Then there are what he calls the personal businesses: the collections of
Impressionist and Indian art, with works by Monet, Chagall and Picasso,
which are scattered in his houses round the world. He loves them, but also
thinks they give a better return than having the money in the bank earning 3
per cent interest. “The first rule is that if it’s not something you love
looking at, you might as well not have it. The second rule is that it must
come at a sensible price. I may sound like a person who has a lot of
extravagant, quote, unquote, interests, but I’m pretty careful with my
money.”
Then there’s the Formula One team he recently bought, and for which he aims
for a podium finish in the first Indian Grand Prix, planned for 2010. “I
have a lot of personal interests, Formula One being one of them.” So if it’s
not a business interest, does that make it a hobby? “It would be rather an
expensive hobby.”
He bought the team formerly known as Spyker (and before that Jordan) because
he believes a lucrative chunk of the 400 million sports-mad Indians who are
under 18 can be converted to F1; it’s elitist, exciting and glamorous. He
believes that in three years, Force India, as he’s renamed it, will be
operating profitably and will ultimately be a valuable asset.
Behind many of Mallya’s ventures lurks not just an unerring business instinct
and focus on the profit margins, but a deep sense of patriotism and a desire
to show India off to the world. “The world has always looked at India as
some sort of impoverished nation where people are starving. We do have our
problems and… I am acutely aware of what the challenges facing India are.
But that doesn’t mean the whole of India is stuck in poverty. India is an
extremely rich nation endowed with a lot of natural resources. Ask yourself:
why did Alexander the Great come to India? Why did the British show up? They
came because India was hugely wealthy… It is a country with humungous
potential.”
He proudly reels off the high disposable incomes and Western tastes of the
new, young, educated Indian middle class. But is anything being lost in the
rush to Westernisation? “Absolutely not.” He serves as an MP for his home
state of Karnataka, says he’s “very religious”, donates heavily to charity –
a hospital and school bear the Mallya name in Bangalore – and has lobbied
hard for investment in local infrastructure. “You can’t grow a centre of
excellence when you have power shortages and traffic jams.” He draws
frustrated, if slightly odd, comparisons with China, which he lauds for
being proactive and building airports and highways, “even when demand at
that point doesn’t justify it. Then they invite the world in, show them this
infrastructure and invite them to invest. In India we have a good legal
system and we speak English. We have many advantages over China, let me
assure you… But in infrastructure we are ten years behind.”
Well, maybe, but China’s ways and means of getting things done aren’t to
everyone’s taste. “That’s a very correct observation. India prides itself on
being a practising democracy. But there is a price for democracy because
everything has to be done with consensus and that slows things down.” But
things are nonetheless improving at a bewildering pace: he says that 20
years ago, you’d wait two years to get a landline installed. Now, four
million mobiles are sold in India every month.
Some things don’t change. As he inherited the business from his father, so
Siddhartha, his 20-year-old son, will inherit in turn. Mallya takes pride in
the fact that he was sent to work as a junior employee in America, and once
worked the night shift as a paint foreman in Bristol. He plans to make his
own son do much the same, in spite of the pleadings of the boys’ grandmother
that times have changed and “he shouldn’t have to do it.” What about his two
daughters? Will they work for the company, too? “If they want to,
absolutely. I have no bias. On the contrary. I have some ladies who work for
my organisation who, I have to say, sometimes perform better than their male
counterparts.”
But Mallya must be going: he is late for a meeting at high-end restaurant
Chutney Mary to taste possible meals for his airline. Behind him, his
(female) assistant arranges a helicopter to pick him up later than planned,
and a BlackBerry beeps disconsolately.
