The Fall of the King of Good

Times
Presented by
Group 6

Abhailyas Mohammed
Boda Lakshmi Prasanna
Mangala Devi R
Saurav Kumar Jaiswal
Teena V Thomas
Introduction
Kingfisher Airline was established in 2003. It started its operation in 2005.
Its Head Office is situated in Andheri (East), Mumbai and Registered Office in UB City,
Bangalore.
By 2011:
Domestic Destination 63
International Destination 8
It started its International Operations on 3rd September 2008 by connecting Bengaluru with
London.
Kingfisher got the Skytrax award for India's best airline of the year in 2011.
By early 2012, the Airline incurred loss over Rs. 7,000 crore due to strike & other problem.
SWOT Analysis
Strong brand value and reputation in the minds of the consumer.
UB group as the parent company.

Strength Quality service and innovation.

More than 80 destinations.
Less than 100 people (employees) per aircraft.

High maintenance cost at ground and airline.

High ticket pricing (KF First & Class).
Weakness Tough competition from Indian as well as International players.
Heavy Debt.
 If able to survive for a couple of years, then can have a big market share.
Expanding tourism business (2012:$116bn , 2013:$122.1bn)
Opportunities Reputation of providing the best quality & services in Indian skies.
Growth in air travel, with businesses and markets doing better.

Rising Fuel Costs.

Rising Labour Costs.
Threat Other low cost airlines providing better services.
Government initiatives in railways with fast running trains like Duronto.
Economic slowdown.
Increasing Debt
Though Kingfisher Airlines (KFA) had a luxurious positioning in consumers share of
mind, it always failed to attract good investors since its inception.
KFA suffered from huge debts and it failed to pay back AAI (Airport Authority of India)
around Rs 840 crore in the year 2008, currently it owes around Rs.3000 crore to AAI.
The downtrend in the aviation industry started only since 2011, but Mallya failed to pay
debts since 2008, which showed his poor commitment to the stake holders.
KFA owes Rs.2000 crore to its vendors and suppliers which further worsens the situation to
continue its operations.
 Declining Trust
With increasing debts and the declining trend in the aviation industry, KFA failed to deliver its services
and it was not able to pay back salaries to its employees.
Over 60 pilots have resigned their jobs in a time span of 2-3 months which crumpled their operation
leading to reduction of flights from 400 to 170 flights per day.
The KFA failed to deliver the trust among the customers, shareholders, suppliers and even the
government authorities.
Even the government was not willing to bail out KFA from the financial crisis
Brand Conflict
Kingfisher Airline, a premium class category in the airline industry acquired a low cost carrier Air
Deccan. This led to brand conflict among the customers, and brand association miserably
weakened since acquisition.
People failed to differentiate the services of Kingfisher Red and Kingfisher which diluted the
existing brand equity.
Decision to buy Air Deccan which is already suffering from low customer turnover was a wrong
move. Acquiring a company with weak balance sheet and a flanker product brand led KFA to
further suffer from financial losses.
Ever since the airline commenced operations in 2005, it has been reporting losses. After acquiring
Air Deccan, Kingfisher suffered a loss of over Rs 1,000 crore (US$199.5 million) for three
consecutive years.
Suggestion for KFA
Adopt low-cost airliner model similar to Air Deccan and Ryan Air.
Minimize operating costs.
Leasing/selling out the planes (unused or minimally used planes) to other carriers.
Bring down cost-per-flight if an airport services more number of flights.
FDI in aviation must be permitted
Cut cost by removing flight from airports with less travelers and high landing and parking cost.
Meet the aspiration of its employees so that they were motivated to contribute to the
organization and also help attract and retain the necessary talent for future growth.