Project Topic Case On Kingfisher Airlines

Submitted to:Ms. Roopa rao

Submitted By:Shreyansh joshi Aarohi khatri Mansi tijoriwala Tulsi meghnani Imran memon
(ICONO CLASTS

KINGFISHER AIRLINES
Vijay Mallya is looking at reports of Q3 of 2008 , thinking that can there be any way to at least break even in this critical time of economic slowdown !viation ind"stry is very sensitive ind"stry triggered hard by the recession across the world #ingfisher reports $s %&2 &' crore net loss (from e)hibit* +, for the -"arter ended 3+st .ecember 2008 /ndian aviation sector is b"ckling "nder rising f"el prices 0 manpower costs and falling air traffic 1ales stood at $s +,223 crore vers"s $s +,3%3 crore, in line with 4et !irways, which also posted a net loss of $s 2+2 crore for the -"arter "nder review beca"se of poor load factors 5he company claimed that technically, the financial res"lts for the third -"arter cannot be compared with the corresponding -"arter beca"se the Vijay Mallya*led #ingfisher was not listed last year and this year6s res"lt incl"de fig"res of erstwhile !ir .eccan, which #ingfisher took over last year 78igh f"el and other operating costs co"pled with lower load factors contrib"ted to the losses at #ingfisher,9 an ind"stry observer said :n the operational front, #ingfisher saw corporate traffic being hit d"ring the -"arter beca"se of the economic slowdown ;ields and front*end load factor also s"ffered 75he f"ll impact of the price red"ction in aviation t"rbine f"el will lower the airlines6 operating costs,9 the spokesperson added

CURRENT PROFILE

/!5!

/<!:

<allsign

IT Founded
Hubs

KFR

KINGFISHER 2002
=engal"r" /nternational !irport

( Primary Hub)
<hhatrapati 1hivaji /nternational !irport

( Secondary Hub)
/ndira >andhi /nternational !irport

( Secondary Hub)
Focus cities !hmedabad <hennai 8yderabad #olkata

Frequent flyer program

King Club 75 (+139 Orders, 25 :ptions) 77 (Including routes served#ingfisher $ed)

?= >ro"p

Fleet size Destinations

Parent company

Company slo an Head!uarters Key people

Fl !"e #ood !i$es

=angalore, /ndia .r Vijay Mallya, C%&

%r' (ites" )*tel, +,) %r' -*.es" ,er$*, +,) %r' /' -*g"un*t"*n, CFO

HI TOR!

#ingfisher !irline is a private airline based in =angalore, /ndia 5he airline is owned by Vijay Mallya of ?nited =everages >ro"p #ingfisher !irlines started its operations on May &, 200% with a fleet of 2 !irb"s !320 aircrafts 5he destinations covered by #ingfisher !irlines are =angalore, M"mbai, .elhi, >oa, <hennai, 8yderabad, !hmedabad, <ochin, >"wahati, #olkata, @"ne, !gartala, .ibr"garh, Mangalore and 4aip"r /n a short span of time #ingfisher !irline has carved a niche for itself 5he airline offers several "ni-"e services to its c"stomers 5hese incl"deA personal valet at the airport to assist in baggage handling and boarding, e)cl"sive lo"nges with private space, accompanied with refreshments and m"sic at the airport, a"dio and video on*demand, with e)tra*wide personalised screens in the aircraft, sleeperette seats with e)tendable footrests, and three*co"rse go"rmet c"isine

CURRENT CEN"RIO
#ingfisher !irlines c"rrently operates with a brand new fleet of 8 !irb"s !320 aircraft, 3 !irb"s !3+&*+00 aircraft and 2 !5$*32 aircraft /t was the first airline in /ndia to operate with all new aircrafts #ingfisher !irlines is also the first /ndian airline to order the !irb"s !380 /t placed orders for % !380s, % !3%0*800 aircrafts and % !irb"s !330*200 aircrafts in a deal val"ed at over B3 billion on 4"ne +%, 200% Cith the sign of tro"ble in aviation ind"stry, #ingfisher airlines and 4et airways ("sed to be competitors,, formed alliance (:ctober, 2008, to significantly rationaliDe and red"ce costs and provide improved standards and a wider choice of air travels options to cons"mers with immediate effect #ingfisher airline has won global awards at the 1#;5$!E Corld !irline !wards ceremony held recently in 8amb"rg , >ermany(200&, !ir France G#HM is in talks with 4et !irways and #ingfisher !irline for having a code*share agreement 5he concl"sion of this agreement co"ld help passengers , especially from smaller cities ,to travel f"rther on the network of these global airline #ingfisher !irlines has la"nched 7Five 1tar @rivileges9 ,an e)cl"sive program that entitles g"ests to avail of great deals at partner establishment aro"nd the co"ntry

 #ingfisher !irlines capt"res market share with strong passengers in Febr"ary 200& as per the latest ministry of <ivil !viation data #ingfisher !irlines has deferred deliveries of some !irb"ses (I!.,@!, aircraft, wary of overcapacity as airlines str"ggles to c"t costs to offset high f"el prices and softer demand 5he !irline , a "nit of alcoholic drinks maker ?= >ro"p , has negotiated with !irb"s to defer deliveries of 32 !320*family aircraft to 20+0*20+2 from2008J0&, #ingfisher, which owns disco"nt carrier .eccan !viation .I<! =:, has five !380 s"per j"mbos on order , sched"led for delivery from 20+2 , as well as 20 !3%0 !ircraft sched"led for delivery from 20+3 /t also has a f"rther 20 !330J200 aircraft on order , making it one of the single largest stakeholders in the !irb"s order backlog by n"mber of planes /ndigo ,paramo"nt M"ll joining 4et !irways (/ndia, limited and #ingfisher !irlines Htd ties "p #ingfisher !irlines Htd plans to sell 2%K stake to allow foreign airlines to invest in domestic carriers, with a cap of j"st below 2'K #ingfisher !irlines Htd in talks to lease o"t two of its !irb"s !330 planes to Ligeria6s !nk !ir $ecently, it has anno"nced management change !ir /ndia has rejected the 4et !irways(/ndia, Himited*#ingfisher !irlines Htd offer to join their !lliance .eccan aviation Htd has changed its name to #ingfisher !irlines Htd @rivate air carrier #ingfisher !irlines has inked an agreement with <itibank <ards which allows members of its M#ing <l"bM holding the bankMs cards redeem their points for flights on #ingfisher !irlines or its partner airlines #ing <l"b is the airlineMs fre-"ent*flyer programme N5he association will benefit members of #ing <l"b, the fre-"ent* flyer programme of #ingfisher !irlines and <itibank cardholders who are #ing <l"b members

SWOT ANALYSIS

KINGFISHERS STRENGTHS
Superior product on ground; in the air Jet business class is being equated with Kingfishers economy UB group backing for raising financing Well capitalised airline prepared to take losses Better handling of employees and staff; less centralised style of functioning !hairman "allyas grand #ision where it is looking to be among the best in the world $he %eccan deal & which gi#es it market share a new market segment and was cheap

KINGFISHERS WEAKNESSES
Kingfisher is yet to build itself into an organisation; structures yet to fall in place 'ot as professionally run as Jet; yet to build a professionally competent team "allyas knowledge of the sector does not parallel (oyals !hairmans people skills are better but employees ha#e to work #ery erratic hours Unable to le#erage connections to the same e)tent while lobbying Kingfishers loads are lower than Jets which could be a reflection of its marketing and sales ability

OPPORTUNITIES
Under penetrated domestic market *nternational market Untapped air cargo market +)panding tourism industry ,leet si-e e)pansion

THREATS
+)isting .perators *nfrastructure issue ,uel price hike

Comparision Between Airlines

Kingfisher Airlines

Indian Airlines

Jet Airwa s

!heck/in !ounter0

+ 2

+ 2 3 * *

+ 2 3 2 *

,light 1ttendants0

+ 2 3 2 *

+ 2 3 * *

+ 2 3 2 *

Seating Space0

+ 2 3 * * + 2 3 2 *

+ 2 3 * *

2unctuality0

+ 2 3 2 *

+ 2 * * *

+ 2 3 * *

PE T "N"L! I

Political Factors
IcologicalJInvironmental /ss"es

O <"rrent Hegislation O F"t"re Hegislation O $eg"latory =odies !nd @rocesses O >overnment @olicies O >overnment 5erm !nd <hange O 5rading @olicies O /nternational @ress"re >ro"ps Iconomic O 8ome Iconomy 1it"ation O :verseas Iconomies !nd 5rends O >eneral 5a)ation /ss"es O 1easonalityJCeather /ss"es /nterest !nd I)change $ates

ocial Factors
3 Hifestyle 5rends O .emographics O <ons"mer !ttit"des !nd :pinions O Media Views O Haw <hanges !ffecting 1ocial Factors O =rand, <ompany, 5echnology /mage O Major Ivents !nd /nfl"ences 3 1o"nd @oll"tion O @lane hijacking
O &J++ /ncident

Tec#nological Factors
O man"fact"ring mat"rity and capacity O information and comm"nications O technology legislation O innovation potential O technology access, licensing, patents O intellect"al property iss"es O moderniDation of aircrafts O modern tehnology like cat3 and ils

E!"n"#i!al Fa!t"rs
Iconomic meltdown :verall growth of the company :perating cost <apital !irlines ac-"isitionJleasing cost $ising income level $ed"ced fare b"t yet not eno"gh

STATUS OF KINGFISHER AIRLINES (passanger based)

On the basis of market share

Airlines Kingfisher Jet airways6Jet 7ite 1ir *ndia *ndigo Spice Jet (o 1ir 2aramount

$ar%et share & 45 48 9: 9; 94 4<8 9<5

MERGERS AND ACQISITIONS

%ec< 4==:7ow/cost carrier %eccan and >i?ay "allya/led Kingfisher 1irlines decided to merge and create a single corporate entity to cut down operational costs and accelerate their ?ourney to profitability< Shares of %eccan 1#iation ha#e doubled in a little o#er a month in anticipation of a re#erse merger of Kingfisher 1irlines into %eccan 1#iation< %etails of %eccan/Kingfisher merger #aluations and swap ratio will be worked out by accountancy firm K2"(< "allya would be the chairman and !+. of the merged entity while e)ecuti#e chairman of %eccan !aptain ( @ (opinath would be the #ice/chairman<

STRATEGIC PARTNERS
9< Kingfisher 1irlines *nks Strategic 1lliance with 1merican +)press< 2artners launch *ndias first 1irline !orporate !harge !ard 2rogram ,ast track !orporate Sa#ings with e)clusi#e @ebates %iscounts and +mployee @ewards with King !lub and Bonus 2oints< 4< Strategic and operational alliance with ri#al domestic carrier Jet 1irways owned by 'aresh (oel in 4==A<

'(rrent strateg "f Kingfisher Airlines

Following strategies were followed to make it one of the leading !irlines in /ndia

Functional strategies
/t planned to re*la"nch its commercial air service called ?= !irway again which it had to withdraw it d"e to government restrictions 5he company gave best services to its c"stomers that were like providing world class interiors, and in*flight entertainment systems 5he company came "p with only one class airlines rather than other airlines that had ="siness <lassP Iconomy <lass the idea was to combine ="siness <lass e)periences and Iconomy <lass e)periences in one 8aving a single class freed "p more leg space for passengers when compared to normal economy class flights 5he company started addressing its c"stomers as 7>?I159 rather than passengers 5he company made its mark by providing its g"ests with more legroom and bigger seats so as to provide better comfort #F! has set its sight to become /ndia6s largest airline both is capacity and in market share

$F"%s Promotional trategies & 'ar(eting trategies

/t came "p with a very appealing promotional line 7Fly the good times9 and it reflected in the e)perience the company offered to its passengers #F! is also la"nched Kingfisher express in order to tap into the growing H<< segment !lso la"nched the facility of web check*in, allowing travelers to print their boarding passes via www flykingfisher com and the introd"ction of the $oving !gent at the

airport 5he $oving !gent is like a check*in co"nter on the move ;o" no longer need to go to the check*in co"nter and wait for long !s part of its promotional strategy the marketing team of #F! showcased the airline as 7the new flying e)perience9 5he following initiatives were taken as part of its promotional strategyQ !dvertisements hoardings at airports depicted the stylish interiors of the 7F"n liners9, which conveyed yo"thf"l, f"n*filled, and world class image /L:E m"ltiple)es in M"mbai p"bliciDed #F!6s special offers for a month #F! was the official travel airlines for the cast and crew of 7Mangal @andey9* the movie #F! made "se of vario"s fashion shows, celebrity golf matches, Lew ;ear parties all to b"ild its 7#ingfisher9 brand 5he ?= gro"ps6 monthly magaDine called 7@egas"s9 p"blished information abo"t #F! along with other information related to ?= gro"p #F! la"nched many attractive offers to promote its sales like the 7#ing <ard9 in association with /</</ =ank, in !"g"st 200% 5his was meant to create loyal c"stomers for #F! by providing benefits like privileged access to lo"nges, resta"rants, free refreshments at airports, access to +80 golf cl"bs across /ndia, special invites for lifestyle shows /n :ctober, #F! la"nched )C#ill Times Offer* in the month of !"g"st 200% and 1eptember 200% /n :ctober they la"nched the )$ing a+er Offer* which said 7Fly like a #ing, don6t play like one9 #F! targeted the fre-"ent fliers b"siness traveler segment, which was dominated by 4et !irways =y offering a 7$ing a+er ,oo(let9, 5his booklet contained si) free flight tickets and was presented as a free gift if the passenger bo"ght two s"ch

booklets each worth $s 2',&&& @assengers co"ld avail off this offer if they showed there 4et @rivilege Member (>old or @latin"m, card

Finan!ial strategies)
#F! came "p with many new financial strategic moves that made it one of the leaders of aviation ind"stry the company had adopted following strategiesA 5he company is planning to spend close to $s 20 crore on vario"s media and below*the*line marketing activities for the year 200&*+0 <"t down the salaries of the staff like trainee pilot now drawing $s20k as compare to $s2 0lacs 5o come over the financial crisis the #FH is considering an option of retrenchment /t p"rchased brand new !320 aircrafts powered by the cockpit that was a paperless environment #F! was first /ndian carrier to place an order for !380s

E-pansion strategy
5o f"rther its e)pansion plan #F! p"t in its bid to b"y 1ahara in Lovember 200% 8ow ever negotiation came to a standstill when #F! felt the val"ation of 1ahara !irlines of aro"nd ?1B3%0mn to ?1B+ bn was too high #F! has plans to make an /nitial @"blic :ffer (/@:, and raise aro"nd ?1B200 mn that wo"ld be "sed for its fleet ac-"isition and ro"te e)pansion activities #F! set "p #ingfisher /nternational /nc (#//,, a s"bsidiary in ?1 for its international operations #F! plans to operate international ro"ts by end of 2003 ="t #F! had yet to receive permission from the /ndian government !ccording to /ndian government domestic air carriers are not allowed to fly international ro"tes witho"t five year of domestic flying e)perience ="t Mr Mallya said if he failed to

convince the government to change its r"les, it wo"ld start an airline in a foreign co"ntry and fly it to /ndia

Human Resource trategies

@rior to la"nch, #F! signed a 7non*poaching alliance9 with !ir .eccan "nder which both the airlines agreed not to hire each other6s employee #F!6s flight attendants called 7Flying models9 were selected thro"gh a national level model contest #F! also stressed the fact that its employees had to be capable eno"gh to meet the airlines6 high service standards Mr Mallya said 7#ingfisher !irlines Himited has a first class management team not j"st at top most level b"t also in the second line 5his is part of the ?= gro"p6s commitment to h"man reso"rces9

Recommen.e. trategies
1ho"ld tie "p with different state to"rism (like >oa, #erala, 5amil Lad" etc, to promote domestic air traffic $"nning online contests to boost traffic Hooking at partnering with premi"m hotels, so that the c"stomers of hotels directly choose #ingfisher airlines for traveling 5o minimiDe the air f"el cost and other operating e)penses of aircraft they sho"ld p"rchase new more f"el efficient and advance technology based aircraft <ode sharing with other airlines $esched"ling of flights so that they can adj"st the load More tie "ps are re-"ired like they can also be a part of 15!$ alliance !t the time of recession making coll"sions and cartels co"ld be a good idea /n s"ch a scenario it is imperative for any airline to b"ild its brand and have a foc"sed marketing strategy and created a new category of !viation hospitality th"s making service and hospitality as main foc"s

5he company sho"ld join hands with certain banks like /</</, 1=/ etc to offer e* ticketing

+)hibit0/9

Income statement of KFA

*(arterl res(lts in +rief Sales .perating profit *nterest (ross profit +2S D@sE ,Rs !r"re.e! / 01 9 BB:<5; /B=5<48 955<AA /8A4<AC /98<88 %ec F =5 .ther income 2ower and fuel +mployee e)penses 1dmin and selling e)penses .ther e)penses %epreciation $a)ation 'et profit G loss +quity capital 1gg<of non/prom< shares D7acsE 1gg<of non promotoholding DHE .2" DHE / 9A;<;5 B<45 / 495<C9 Se2 / 01 9 ;44<CB /85:<4: 9;8<55 /C55<=C /95<9: Sep F =5 ;8<=A / 4=:<8: J(n / 01 9 ;A:<CC /8B<4A 99=<9B /98:<B8 /99<C4 Jun F =5 C<A5 $ar / 01 88:<C9 /4=5<:8 4:<A: /95C<C: /9B<: "ar F =5 8=<=8 ;9A<55 5:<8

/ 9 CC4<:= ;;<4A /494<58 /B9;<;A 4C8<A9

/ 9 CA9<;= ;4<A9 /4;:<:4 /B5;<48 4C8<A9

/ 9 4BB<;5 ;4<=4 /;9<C /98:<5: 9;8<5:

;5<AA ;9A<AA 99<8: 9<B9 /9AA<C8 9;8<5

5AC<A

5AC<A9

C54<AC

;;<:; /45<4

;;<:; /BB<B

8=<4: /;<55

/ /;:<BB

(2" DHE '2" DHE

/B=<5; /45<B:

/8=<C5 /;8<8A

/99<49 /99<4B

/;=<:4 /;4<5C