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FAILURE OF KINGFISHER AIRLINES
Swapnil Darji (11MBA012)Hardik Patel(11MBA108)Nikendra Sisodiya (11MBA100)Dinju Gamit (11MBA016)
INTRODUCTION TO UB GROUP
•Founded in-1857•Chairman–Dr. Vijay Mallya•Headquartered –Richmond Road, Bangalore
•Products-
Brewery,AlcoholBeverage,Aviation,Chemicals&Fertilizers,MangaloreChemicalsandFertilizersLtd,UBGlobal( trading company)
INTRODUCTION TO KINGFISHER
VISION “The Kingfisher Airlines family will consistently deliver a safe, value based and enjoyable travel experience to all our guests.”
Sanjay Agarwal is the current CEO of the company
Kingfisher Commenced its operations on May 9,2005.
KingfisherAirlines is also the sponsor of F1 racing outfit, Force India
MARKET SHARE
CURRENT POSITION
The Main Departments we deal with
Top Management
Finance HR Marketi
ngOperatio
ns
31destinations in India Focused & Profit
making routes Low price compared to
King fisher red Focus on Low Cost
Airlines Innovative and radical
method so fair line back end operations like
financing , leasing. Less Turnaround time
as compared to Kingfisher red
63 domestic destinations in India
Many Unprofitable routes like Nasik , Hubli etc.
Strict rules by DGCA on implementation of Time Table
Operations shifted to New Terminals in Delhi & Mumbai.
Focus diverted from high service to low cost
More Turnaround time as compared to Indigo
Standardized Aircraft Less Inventory of SparesLess Training CostLess Maintenance CostLess Operational costEffective Terminal UseEasy Scheduling
High Inventory of SparesHigh Training CostHigh Maintenance CostHigh Operational CostScheduling difficultMore Human Resources
required
Diversified Aircrafts with different capacities
• Frankly, it was a hassle-free decision for Vijay Mallya to completely suspend services on his budget carrier Kingfisher Red, says one of his close confidantes. • Formerly known as Air Deccan, Mallya had bought 26% stake in this airline from his friend-cum-neighbour Captain Gopinath in 2007 at Rs 550 crore and later picked up additional 20% stake at around Rs 155 a share.• The intention of acquiring Deccan was only aimed at giving Kingfisher Airlines (KFA) an access to international routes quickly.
• Government rules gave overseas flight rights only to airlines with a minimum of five years experience, and KFA was behind in the queue after Deccan. •“Mallya never believed in low fare business model even when he bought the airline,” says an official with the airline.
WHAT WENT WRONG?
• The dismal performance of Red all these years made Mallya realise that the high profile ‘classy image’ of his very own KFA is taking a hit due to him simultaneously running a low cost service.
• Meanwhile, discontinuing Kingfisher Red may have come as a surprise to a few at a time when low fare carriers like Jet Lite, Indigo and Spice Jet are doing better then their full service peers in terms of load factors--- but the news has not sprung any surprise to analysts and Kingfisher Airlines (KFA) officials who had guessed something of this sort was on its way.
•Holiday packages-at unprofitable routes like Nasik, Aurangabad
•Pricing-Should beat par with Spice jet and Indigo
•Tie-ups with Corporate •Frequent flyer programmes •Better deals and offers for flyers
in air
RECOMENDATIONS – MARKETING STRATEGY
1.Route rationalisation: Cutting back unprofitable sectors and services to several cities
2.Debt recast: Asking banks to reduce rates or take a cut on loans or find a 'local investor‘
3.Raising capital: It has plans to raise $200 million through GDR
4.FDI: If the FDI limit is raised and foreign airlines are allowed to buy a stake, Mallya could recapitalise Kingfisher
GENERAL RECCOMMENDATIONS
Thank You