News: ‘Enter retail, revisit airports’

(IE 03/04/2006) Mumbai - The retail fever is fast catching up. Even before the noise created by Mukesh Ambani’s high-profile recruitment for his retailing venture died down, another tycoon appears to have been hit by the retail bug. This time round it is telecom baron Sunil Bharti Mittal. Industry sources claim that Mittal is already in talks with global retailers Wal-Mart and Tesco to plot his maiden entry into the sector. They further add that the tycoon is in talks with the latter for a œ750-million joint venture to launch a supermarket chain in the country. Mittal refuses to share any details about the project at the moment. He however maintains that contrary to general perception, his ‘retail link’ is not entirely new as his agri products company Fieldfresh Foods (Bharti’s joint venture with El Rothschild Group) is already supplying produce to Tesco. The tycoon should be well aware that supplying to an international retail chain and running a retail chain could be entirely different ball games. It’s quite apparent now that Mittal is not one to remain content with the ‘telecom czar’ tag. Only a year back he had made a high-profile entry into the airport privatization space, which subsequently was aborted following the withdrawal of his foreign partner Changi. But Mittal is again bracing up for the airport modernization arena. He is waiting for Government’s decision on invitation of bids for the modernization of Kolkata and Chennai airport. But having burnt his fingers once, the tycoon of course will be treading cautiously this time round but the word is he aims to be there.

Embracing Embraer

M. Thiagarajan’s Paramount Airways is not just another low-cost airline though it was born at a time when ‘budget lines’ are calling the shots. To distinguish his offering from his competitors, the tycoon has opted not only for a completely different revenue model but a different kind of aircraft as well - Embraer. Thiagarajan was the first to bring the Brazilian aircraft maker to India and is now looking to add at least 20 more of them during the next two years. But realizing that the 70-90 seater Embraer 170/175s restrict his revenue earning potential, the tycoon this time round is considering adding the new Embraer 195s to his fleet that can carry 108-118 passengers. But the tycoon is yet to decide as to how many of the new acquisitions are going to be Embraer195s. Aviation observers believe Thiagarajan’s talks with the Brazilian aircraft manufacturer is at an advance stage. Interestingly Boeing executives have also made a presentation to him to sell their new varieties. But Thiagarajan is unlikely to go for the large Boeings, as they don’t suit his current revenue model. Thiagarajan plans to induct 10 Embraers by the end of 2006 and is likely to double his fleet by the end of next year. Despite his ambitious fleet expansion plans, the tycoon is intent on remaining focused on South India only for sometime now. For he knows it wont be prudent to think national yet, even with a lean mean fleet.