BUSINESS POLICIES AND

STRATEGIC MANAGEMENT
KINGFISHER AIRLINES CASE STUDY
Under the guidance of

Prof. Suresh Vishwanath

Submitted by Chetan Patil -15307
Pradipkumar Gosawi 15321
Monika Phapale 15323
Gaurav Dharmadhikari -15337
Arjun Adalkar - 15338
Ankita Sonaje 15343
Bhushan Shende 15346
Col. V. C. Sharma - 15362
Col. Sundeep Karla 15364
Anuranjan Sah - 15369

Key highlights from Case:

Kingfisher Airlines: Established in 2003. Listed in 2006.

Full Service Airline
Acquisition of Air Deccan (Low Cost Airline) in 2007
Growing losses year by year
All Stakeholders were dissatisfied

What went wrong?

Frequent Changes of Focus: Kingfisher was a full service airlines offering
various luxurious services. After acquiring the Air Deccan they suddenly
shifted focus on low-cost air traveling. Frequent changes in the
hospitality and aircraft ambience made travelers lose their interest in
the brand. They didnt focus on highly profitable routes in domestic
area. Also there was no proper syndication between them.
Acquisition for Expansion: Kingfisher airlines acquired the Air Deccan for
the sake of expansion. As per the International Airline Policy, any airlines
should have minimum five years of domestic experience in their
respective area to get the international routes license. Without stabilizing
in the domestic market to know the ground realities of the airlines
industry, Kingfisher stepped into the international routes where the
competition is very high compared to the domestic airways. Acquisition
and expansion were the two factors which started throwing kingfisher
into downfall.
Economic Slowdown: Another external factor for the Kingfisher downfall
is economic slowdown in 2008, Kingfisher first started an international
route from Bangalore to London in 2008. Same year recession affected
the whole world, which indirectly affected the air travel occupancy in
international routes. Because of the recession, airplane fuel prices raised.
Also Airport charges for landing are very costly in international airports
around the world, all these external factors caused the Kingfisher airlines
to downfall.

 Lack of Management: Mallya was not just into one business but several
and each as different as the other. Normally, for such diverse businesses,
one would appoint a CEO each to run it with a hands-on approach who
would, in turn, report to the group chairman. There was no single CEO
continued for one year in Kingfisher airlines. There was a frequent change
in the top level management. Mr. Vijay Mallya never took any serious
interference in day-to-day operations.

High Operational Cost: Operational costs of the airline industry are very
high compared to any other industry. Companies have to buy the licenses
for the routes, invest in the aircraft maintenance and also salaries for the
employees are very high. Airports charges fees for landing and parking.
Aircraft fuel prices frequently change as per the international crude oil
rates. The government collects huge taxes from the airline companies.
There is a lot of competition between airline companies. All these high
operational costs without good profit margin caused the Kingfisher to
downfall.

What should have been done by Kingfisher to regain the trust

of Stakeholders?