KINGFISHER AIRLINES

A BRIEF CASE STUDY

KINGFISHER AIRLINES kingfisher airline started its operation on 9th may 2005 A major Indian airline based in Mumbai. Kingfisher Airline is one of the only seven Airlines awarded 5 star rating by

Skytrax. In may 2009 Kingfisher Airlines Carried more than 1 million passengers. Total connection of 70 cities and 7 international destinations. Flying over

350 flights a day. Current fleet size of 67 aircrafts and market share of 20.8% Recognized as one of the India ‘s most respected companies in 2006.

India ‘s only five star airline.

SERVICES

Domestic ◦Kingfisher first◦Kingfisher class◦Kingfisher red

International◦Kingfisher first◦Kingfisher class◦Kingfisher red◦Kingfisher Lounge.

Financial strategiesKey initiative to enhance performance.

◦New frequent flyer program launch with unique feature non –air rewards , family club etc….

◦Improve internet booking engine.Stringent actions planned and undertaken

to keep cost under control.◦Redelivery of non-operational aircraft.◦Reduced engineering cost by 10-15 % by induction of

new key vendors.◦“Fuel monitoring system” reduction in fuel

consumptions◦Control on overheads ,e.g.… optimized offices and

warehouse spaces.

HR strategy

Non poaching alliance with Air DeccanFlying models – selection procedure through

national level model contest.Hand picked staff by Mr. Vijay malya.Bank on buddy programme.HR connect magazine.

HR Strategies

Marketing MixPRODUCT

◦ Domestic and international air journeys◦ Airbus A-320 , A-319-100 and ATC 72, ATR 72-500 and ATR 42-

500◦ Merger with Air Deccan “KINGFISHER RED”◦ Kingfisher Elite.

PRICE◦ Target higher income group◦ SEC A-1 , A-2 , B-1.◦ Business class.

PLACE

◦Wide network –major focus metro cities.◦Flight bookings.◦Book in person◦Travel agents◦Online◦India ‘s first “Fly by SMS ” services.

Promotion strategyPersonal selling

◦Travel agency◦Offers◦Frontline staff◦King club◦Brand Ambassador◦Hoardings◦Personal feedback

People Special luxurious services.

◦ Inflight entertainment System on every seats

Kingfisher Elite◦ Custom design Luxurious interiors.◦ State of the art technology features◦ Exclusive check-In counters.◦ Experienced and highly trained professional crew.

Special Assistance◦ Guest with disabilities and reduced mobility◦ Unaccompanied minors◦ Expectant mothers and infant◦ Other special needs , wheelchair /stretcher.

Special meals

Strategic overview.KFA started its customer as GUEST rather

then passengers.Appealing promotional line ” FLY THE GOOD

TIMES ” and it reflected in the experience company offered to its passengers

KFA gave best services to its customers like providing world class interiors and in-flight entertainment systems

KFA came up with only one class airlinesKFA created new category of Aviation

hospitality thus making service and hospitality main focus.

Swot analysisSTRENGTH

◦ Strong brand value and reputation◦ Regional connectivity◦ Efficient staff◦ Capitalization◦ Visionor◦ Quality and continuous innovation

WEAKNESSES◦ Indian psychology◦ Infrastructure constrains.◦ Facing tough competition from ◦ competitors.

OPPORTUNITIES◦ Expected huge investments◦ Expanding tourism industry◦ The non-penetrated domestic ◦ market◦ Un-tapped air cargo market.

THREATS◦ Competitors◦ Fuel price hike ◦ Economic shutdown.

Kingfisher airlines (factors) POLITICAL FACTORS.

◦ Open sky policies◦ FDI limits :100% for green field airport

◦74% for existing airport◦100% through special permission◦49% for airlines

ECONOMICAL FACTORS◦ Contribution to Indian economy.◦ Rising cost of fuel◦ Investment in sector of aviation◦ The growth of middle income group affect the aviation

sectors

SOCIAL FACTORS◦ Development of cities leads to better services and

airports◦ Employment opportunities◦ Safety regulation ◦ The status symbol attached to air travel

TECHNOLOGICAL FACTORS◦The growth of e-commerce and e-ticketing◦Satellite based navigation system.◦Modernization and privatization in airport◦Development of green field airport with private

sectors e.g… Bangalore airport corporation limited.

ENVIRONMENTAL FACTORS◦ The increase in global warming ◦ The sudden and unexpected behavior of atmosphere

and dependency on weather.◦ Shortage of infrastructural capacity.◦ Tourism saturation

LEGAL FACTORS◦ FDI limits◦ Bilateral treaties◦ Airlines acquisition and leasing cost

1. Lack of delegation is the primary reason. 'I am taking things personally,' Vijay Mallya, chairman of Kingfisher Airlines, says when it comes to running his airline. 2. Unlike his other two major businesses - the spirits and beer segments - which have been running exceptionally smoothly under the helm of managing directors, the airline has been crash landing because of one trouble or another with frequent changes in strategy and direction as well as the absence of no long term CEO or MD.  3. Step-child treatment to Air DeccanCaptain GR Gopinath, who sold his low-cost airline Deccan Airline to Kingfisher Airlines, admitted that there was a disconnect between the two arms of the airline models. Low-cost aviation business was treated as a step-child. Post the merger, whenever there was an Air Deccan and Kingfisher flight at almost the same time-slots, a decision was taken to do away with the Air Deccan flight in the hope that the passengers will graduate to Kingfisher full-service. But just the opposite happened. 4.In-flight interruptionUnlike road or rail transport, where there’s much of scenery around to keep you busy, flights are usually boring. Much of the travel through flights between metros is covered in less than two hours. In-flight entertainment or a movie is started only after the seat-belt signs are off. And then there’s interruption of meals being served. Most passengers on domestic flights are not looking forward to in-flight entertainment. They want to reach their destination on time. In-flight entertainment can be handy for a weary traveller on international circuits only. 5. Unfair faresWhile KFA truly offered a premium and luxury service it took pride in calling itself a budget airlines. It refrained itself from calling itself an LCC (Low-cost-carrier) as its fares while were higher than the LCCs, it kept its fares lower than Jet Airways, Indian Airlines (now Air India) and the erstwhile Sahara. 6. Burning fuelAmidst this all, Dr Mallya forgot that he was operating in a business where fuel costs are variable and taxes are discretionary. Add to all this the costs of high-blitz advertising, including the deal with Ms Padukone, putting up exclusive lounges at airports, gourmet cuisine, tele-booking centres, the expansive and expensive frills (touch screen seat controls, sensuous mood lighting, unique starry sky, in-seat chargers, in-seat massagers, an exclusive amenity kit and facilities like jacket ironing, music streaming through Bose noise cancellation headphones) in Kingfisher First… aircraft costs, acquisition costs of Air Deccan… and what not. 

Reason for failure

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