STRATEGY FORMULATION

AND
IMPLEMENTATION
AVIATION SECTOR
INTRODUCTION TO THE AVIATION INDUSTRY
The 1884 La France, the first fully controllable airship
Although many people think of human flight as beginning with the aircraft in
the early 1900s, in
fact people had been flying repeatedly for more than 100 years.
 Wright brothers’ first successful flight in Kitty Hawk in 1903.
 American Airlines in 1928 and United Airlines in 1931.
 Development of the mail system by the U.S. Postal Service helped create
the airline
industry.
 Increased R&D of aircraft after World War II: World War II saw a drastic
increase in the
pace of aircraft development and production. All countries involved in the
war stepped up
development and production of aircraft and flight based weapon delivery
systems.
After World War II commercial aviation grew rapidly, used mostly ex-military
aircraft to
transport people and cargo. This growth was accelerated by the glut of
heavy and super-heavy
bomber airframes like the B-29 and Lancaster that could be converted into
commercial aircraft.
The DC-3 also made for easier and longer commercial flights. The first North
American
commercial jet airliner to fly was the Avro C102 Jetliner in September 1949,
shortly after the
British Comet. By 1952, the British state airline BOAC had introduced the De
Havilland Comet
into scheduled service.
OVERVIEW OF THE GLOBAL AIRLINE
INDUSTRY
 The global airlines industry grew by 11.3% in 2007 to reach a value of
$429.9 billion
 In 2012 the industry is forecast to have a value of $711 billion, an
increase of 65.4%
since 2007
 The industry grew by 5.6% in 2007 to reach a volume of 2,076 million
passengers.
 In 2012 the industry is forecast to have a volume of 2,362 million
passengers, an
increase of 13.7% since 2007
 The domestic segment dominated in the global airline industry and
accounted for 1.4
billion passengers in 2007, equivalent to 66.5% of the industry's overall
volume
 The Americas region is the largest airline industry in the world
accounting for
51.1% of the global industry's value
 The report informs business decisions, enabling the reader to spot future
trends and
developments. Furthermore, the information contained in the report adds
weight to
presentations and helps the reader to save time carrying out entry-level
research.
 The global airline industry consists of over 2000 airlines operating more
than 23,000
aircraft, providing service to over 3700 airports.
 In 2010, the world’s airlines flew almost 28 million scheduled flight
departures and
carried over 2 billion passengers.
 The growth of world air travel has averaged approximately 5% per year
over the past
30 years, with substantial yearly variations due both to changing economic
conditions
and differences in economic growth in different regions of the world.
 Historically, the annual growth in air travel has been about twice the
annual growth
in GDP.
 Even with relatively conservative expectations of economic growth over
the next 10-15
years, a continued 4-5% annual growth in global air travel will lead to
a doubling of
total air travel during this period.
 In the US airline industry, approximately 100 certificated passenger
airlines operate over
11 million flight departures per year, and carry over one-third of the world’s
total air
traffic – US airlines enplaned 745 million passengers in 2010.
 US airlines reported over $160 billion in total revenues, with approximately
545,000
employees and over 8,000 aircraft operating 31,000 flights per day.
 The economic impacts of the airline industry range from its direct effects
on airline
employment, company profitability and net worth to the less direct but very
important
effects on the aircraft manufacturing industry, airports, and tourism
industries, not to
mention the economic impact on virtually every other industry that the
ability to travel by
air generates.
 Commercial aviation contributes 8 percent of the US Gross Domestic
Product, according
to recent estimates.
OVERVIEW OF THE INDIAN AIRLINE INDUSTRY
 Indian aviation industry is growing at 17% rate for the last few years with
more than 40
million passengers have travelled in domestic sectors and more than 20
million
passengers have travelled in international sectors in India in 2008.
 The number of airports in India has also been increased significantly with
15
international airports, 87 domestic airports, 27 civil enclaves and more than
300 small
airstrips.
 Also air cargo is growing at a rate of 13%-14% and contributes around
0.2% of India’s
GDP. Besides the year old public company Air India the major private players
operating
in Indian market are Jet Airways, Kingfishers, Spice Jet, Indigo, Paramount,
Go Air etc.
 Among this Kingfisher has the largest market share of 21% closely
followed by Jet
Airways with 19.5% market share.
 Indian airline have maintained a seat factor of 70% to 80% in 2009.
 Aviation Industry in India is one of the fastest growing aviation industries
in the world.
With the liberalization of the Indian aviation sector, aviation industry in India
has
undergone a rapid transformation.
 From being primarily a government-owned industry, the Indian aviation
industry is now
dominated by privately owned full service airlines and low cost carriers.
 Private airlines account for around 75% share of the domestic aviation
market.
 Earlier air travel was a privilege only a few could afford, but today air
travel has become
much cheaper and can be afforded by a large number of people.
 The sector deals with the transport of passenger and cargo from one place
to another,
using the aerial route.
 About 75 million passengers are use the service contributing $5.6billion
every year.
 Around 15% growth rate is been registered in last 10 years.
 Growth in 2020 statement predicts handling 280 million customers by
2020
MAJOR CHANGES IN AVIATION INDUSTRY
 1986: Private Sector Players permitted as Air taxi operators. Jet, Air
Sahara, etc started
service.
 1994: Private Carriers permitted to operate scheduled services. Six
operators granted
license, however only Jet and Air Sahara able to service.
 2003: Entry of low cost carriers. Air Deccan, Spice Jet, Go Air, Indigo.
PLAYERS IN INDIAN AVIATION INDUSTRY ARE
 The players in aviation industry can be categorized in three groups:
 Public players : Indian Airlines
 Private players: Jet Airways, Kingfisher Airlines, Spice Jet, Air Deccan.
 Start up players : Omega Air, Magic Air, Premier Star Air & MDLR Airlines
KINGFISHER AIRLINES
UB group based in Bangalore, is a conglomerate of different companies with
a major focus on
the brewery (beer) and alcoholic beverages industry. The company markets
most of its beer
under the Kingfisher brand. The group is headed by Dr Vijay Mallya. The UB
Group was
founded by a Scotsman, Thomas Leishman in 1857. Kingfisher, the Group's
most visible and
profitable brand, made a modest entry in the sixties. During the 1950's and
60's, the company
expanded greatly by acquiring other breweries. First was the addition of
McDowell as one of the
Group subsidiaries, a move which helped United Breweries to extend its
portfolio to wines and
spirits business. Strategically, the Group moved into agro-based industries
and medicines when
Mallya acquired Kissan products and formed a long-term relationship with
Hoechst AG of
Germany to create the Indian pharmaceutical company now known as
Aventis Pharma, the
Indian subsidiary of the global pharma major Sanofi-Aventis. The UB Group’s
Brewing Entity -
called United Breweries Limited (UBL) - has also assumed undisputed market
leadership with a
national market share in excess of 50%. Through a process of aggressive
acquisition and market
penetration, The UB Group today controls 60% of the total manufacturing
capacity for Beer in
India.
Of the many private aviation companies in India, Kingfisher Airlines is one
name that has
established itself in a short time span as the hallmark of quality. Today the
main hub of this
aviation giant is at the Chattrapati Shivaji International Airport in Mumbai
and its registered
office is in Bangalore, India. Owned by the United Breweries group which has
made rapid
strides under the leadership of Vijay Mallya, Kingfisher Airlines is the top
airlines in the region
and has also been awarded a five star status. The company also has a low
cost cousin which
operates by the name of Kingfisher Red and is a pioneer in the Indian low
frills airlines industry
just like its bigger brother.
A plane of the Kingfisher Airlines can be easily identified by the official logo
of the company
which is a flying kingfisher bird with red, blue and green colors forming the
background. This is
one of the major luxury carriers in India and its flights take off for more than
70 destinations.
People in India now prefer Kingfisher over other airlines because of the
remarkable on-board
services. When it comes to the in-flight services, Kingfisher is simply the
best.
One of the key reasons of the very high popularity of Kingfisher Airlines is the
fact that its entire
staff is considered among the best dressed and best trained. Kingfisher also
excels in a number of
other areas like courteous service, cheap airfares, and a huge set of special
discounts and offers.
Compared to nearly every other air carrier in India, the interiors of Kingfisher
aircraft are like
heaven. They offer truly world-class luxurious amenities and when flying with
Kingfisher you
really feel special. At a number of times, Kingfisher Airlines offers cheaper
airfares for the
people who prefer online ticketing. Kingfisher Airlines has a website that
allows not just online
booking of flights but also allows you to check flight status, applicable air
fare and much more.
One more reason of the huge success story that the airline has become is
the fact that the
company takes its social and environmental responsibility very seriously. The
company is always
committed and makes regular efforts to reduce its carbon footprint. The
most recent step by
Kingfisher Airlines and Kingfisher Red in this direction is their collaboration
with Anna
University to explore alternative fuel choices like biodiesel along with the
possibility to mix and
use this fuel with the jet fuel. In India, Kingfisher Airlines is the way to fly.

THE ENVIRONMENT
PESTEL ANALYSIS
Political Factors
Indian political scenario has, is and will undergo various changes. Following
are the various
policy changes which might have an impact on aviation industry in coming
years:
1. Open Sky Policy :
India had this agreement with 40 countries and lately it signed the policy
with UK, USA
and European Union. According to this policy, the signatories are allowed to
fly over the
skies of India. Under this arrangement, airlines from EU member nations will
be allowed
to operate flights to India from any of the 25 EU nations regardless of the
carrier's
country of origin. Effect: Tourist arrivals in India are expected to grow
exponentially,
especially due to the open sky policy between India and the SAARC countries
and the
increase in bilateral entitlements with European countries, and the US. The
increase in
number of international tourists will percolate down to increase in domestic
passengers.
2. Modernization Of Airports:
The Indian Cabinet has approved a proposal mandating the state-run airport
operator to
modernize 35 airports in second-tier cities within the next two years. The
modernization
process will cost the government between Rs. 70 to 80 billion. Delhi
(Rs.8,700 cr) to
GMR and Mumbai Airport Modernization (Rs.6,400 cr)to GVK are two biggest
investment projects . Total investment on hand in airport infrastructure
crossedRs.35,000
crore in the quarter ended January 2006.This investment was spread over 89
projects.
Upgradation of Kolkata and Chennai airports is on anvil. Simultaneously, 20
non-metro
airports will be developed. Two biggest active projects are the Bangalore
International
Airports Authority Ltd (Rs.1.5 crore) and GMR Hyderabad International
Airport Ltd
(Rs.1.5 crore). Effect: Improved infrastructure would lead to rise in no. of
travelers and
also so would encourage more operators.
3. Reduction on Excise Duty:
From January 9, 2004, the excise duty on ATF was reduced from 16 to 8
percent. The
average domestic price of ATF is 99 per cent higher than prices in foreign
countries and
affects domestic airlines drastically as ATF accounts for 30 to 40 per cent of
operating
costs Effect: It would lead to low fares thus giving a boost to air travel. The
government
has reduced the average age of aircraft being imported into India for
commercial airline
operations by five years. Effect: It would lead to increase in imports of
aircraft thus can
discourage more operators coming in and improve services.
Economic Factors
India, ranked tenth in the world in 2004, is expected to be holding eighth
rank in the world by
2014 and fourth rank in next year’s with a GDP of $1.15-1.4 trillion and $2.1-
3 trillion
respectively, and a projected growth rate of 6-8%.
Effect: This rise in income levels along with introduction of no-frills flights will
lead to:
• Rise in no of travelers,
• More investments in aviation,
• More competition and
• Rise in industrialization leading to more need of air transport
Socio – Cultural Factors
The growing rate of technology & workforce the airline sector generates
employment
opportunities for well qualified people.
It is the responsibility of the airline department to safeguard the interest of
the passengers.
As new and reasonable airlines are coming into existence there has been an
change in the
lifestyle of people now prefer to travel through flight to distances where they
can afford. This has
brought in a change in lifestyle.
1. Change in Lifestyle :
Average income of middle class household is expected to rise to 194000 Rs
by 2010 from
169000 Rs in 2001-02.No of households projected to be 43.6million in 2010.
Effect: So
there is going to be change in lifestyle and spending of people Due to this
change people
will prefer Low cost airlines instead of Railways first air-conditioned thus rise
in air
traffic.
2. Rise in Leisure travel:
Tourism industry grew 8.8 per cent over 2003- highest growth rate in the
world. 3.2
million Foreign tourists visited India last year. There has been an increase in
leisure
travel by tourists of 15% in 2004. Effect: It will lead to increase in number of
tourist
passengers thus more encouragement for new operators.
Technological Factors
1. Growth of electronic ticketing:
The electronic industry continues to be plagued by spiraling costs, making
cost
cutting is a necessary survival tool. One sure method for airline to cut cost is
by
increasing the use of e-ticketing. It cuts distribution cost and it also reduced
back
office accounting and traveler’s can also book ticket sitting on their personal
computer.
2. Modernization and privatization of airport:
Installation of new technology, modernization of infrastructure and
participation of
private players fuel the growth of airline sector.
Ex- Sahara airport.
3. Developing Greenfield airport with private sector:
Greenfield airport means a new airport which is built from scratch in a new
location
because the existing airport is unable to meet the projected requirement of
traffic. It
will add to a rapidly expanding network of domestic airport fuelling socio-
economic
growth across the length and breadth of country.
Environmental Factors
1. Increase in global warming: Aviation impacts the environment because
aircraft
engines emit noise, particulate gases, contribute to climate change and
global dimming
and the rapid growth of air travel in recent years contributes to an increase
in total
pollution attributable to aviation contribute to global warming.
2. The sudden and unexpected behavior of the atmosphere and the
dependency
on weather: The sudden and unexpected behavior of the atmosphere
causes cancellation
and delay in flight. Increment weather can affect air travel in any season,
even on the
clearest days, whether its high winds, rains, sleet or snow.
3. Shortage of infrastructure capacity: Aircraft spend useless time
circling round
airport for want of landing slots and parking bays. Aircraft have to be parked
at night at
airports which do not have any viable commercial traffic on account of the
shortage of
parking bays at major airport.
4. Tourism saturation: Tourism receiving areas have a finite capacity due
to
factors such as the limited amount of accommodation that can be provided
and the other
reason is increase price of air tickets.
Legal Factors
1. FDI Limits:
Forty nine per cent foreign direct investment (FDI) is permitted in financing
airport
infrastructure as well as in airport ground handling. The government has
recently
increased FDI from 40 per cent to 49 per cent in domestic air carriers.
However foreign
airlines are not permitted to pick up a stake directly or indirectly. Non-
resident Indians
and corporate bodies are allowed to hold up to 100 per cent equity in
domestic airlines.
2. Bilateral Treaties:
3. Safety Regulation:
Current Scenario
Change in business of aviation industry from October 2008 to October 2009
There were 2 main reasons for decline in the aviation industry:
1. Worldwide economic slowdown: The worst to be hit by it was USA but
its effect could
be seen all over the world. The leading airlines started giving lay-offs to bear
less loss of the
economic slowdown.
2. Terror attack in Mumbai: This might be the second reason in recession
of the airline
sector as there were cancellations and postponed visits sue to security and
safety reasons.
The industry was affected by the record of high fuel prices and financial
markets going globally
down. The industry accounts only 2% o the world aviation market and the
losses were us$2
billion.
October 2008:
The growth of aviation industry saw a dip of 15% decline in air passenger
traffic. During
third time many airline started i.e. Jet and Kingfisher started giving lay-offs to
reduce cost in
business. Several private sector owners sat together and demanded
concessions from
government to protect against high aviation turbine fuel and airport charges.
The impact of
global slowdown and high price of aviation has turbine fuel. It accounts to
40% of the Indian
carrier operating cost compared with 25% to 30%carriers globally. The
growth slowed by
4.7% in 2008.net losses were forecasted to to reach 4.7 billion US $ up from
2.5 billion US $
in December 2008.premium passenger numbers fell from 17% while cargo
fell by 23%. The
biggest ever annual falls in revenue in 2009 with drop of us$62billion or 12%
to US $467
billion.
October 2009:
The slowdown hit aviation industry has started witnessing some stability in
passenger traffic.
The figures showed marginal improvement in air traffic from 3.63 million
passengers in
august 2009 to 3.59 million in months before. Other has been 14 to 15 % rise
in passenger
traffic.
In November 2009 the aviation industry is showing a boom where there has
been double digit
growth in October with 37% growth in passenger against growth of 19% in
august and 11% in
September these figures include both domestic and international. Also one of
the reasons for
growth during this time was seen as to be low fare and attractive packages
by the airlines. a
source from the industry had mentioned, “ if the oil prices stay below $50,
air traffic for 2009
would be same to 2007 -08”. Airlines like spice jet, indigo have been hiring
pilots and cabin
crew. While kingfisher warned its employees of delayed salaries reporting to
loss of Rs 240 crore
and declared it5s flight to cut cost.
PORTERS FIVE FORCES
Threat of New Entrants.
At first glance, you might think that the airline industry is pretty tough to
break into, but don't be
fooled. You'll need to look at whether there are substantial costs to access
bank loans and credit.
If borrowing is cheap, then the likelihood of more airliners entering the
industry is higher. The
more new airlines that enter the market, the more saturated it becomes for
everyone. Brand name
recognition and frequent fliers point also play a role in the airline industry.
An airline with a
strong brand name and incentives can often lure a customer even if its
prices are higher.
Power of Suppliers.
The airline supply business is mainly dominated by Boeing and Airbus. For
this reason, there
isn't a lot of cutthroat competition among suppliers. Also, the likelihood of a
supplier integrating
vertically isn't very likely. In other words, you probably won't see suppliers
starting to offer
flight service on top of building airlines.
Power of Buyers.
The bargaining power of buyers in the airline industry is quite low. Obviously,
there are high
costs involved with switching airplanes, but also take a look at the ability to
compete on
service. Is the seat in one airline more comfortable than another? Probably
not unless you are
analyzing a luxury liner like the Concord Jet.
Availability of Substitutes.
What is the likelihood that someone will drive or take a train to his or her
destination? For
regional airlines, the threat might be a little higher than international
carriers. When determining
this you should consider time, money, personal preference and convenience
in the air travel
industry.
Competitive Rivalry.
Highly competitive industries generally earn low returns because the cost of
competition is high.
This can spell disaster when times get tough in the economy.
SWOT ANALYSIS OF INDIAN AVIATION
INDUSTRY
STRENGTH
1. Growing tourism: Due to growth in tourism, there has been an increase
in number of the
international and domestic passengers. The estimated growth of domestic
passenger segment is
at 50% per annum and growth for international passenger segment is 25%.
2. Rising income levels: Due to the rise in income levels, the disposable
income is also higher
which are expected to enhance the number of flyers.
3. Opening of domestic aviation sector to private airlines and strong
economic growth are the
major reasons for rapid growth in aviation sector. Also as Indian aviation
industry is relatively
new, the planes are relatively new which results in better operational
efficiency, passenger
comfort and longer lifetime.
WEAKNESS
1.Under penetrated Market : The total passenger traffic was only 50
million as on 31st Dec
2005 amounting to only 0.05 trips per annum as compared to developed
nations like United
States have 2.02 trips per annum.
2. Untapped Air Cargo Market: Air cargo market has not yet been fully
taped in the Indian
markets and is expected that in the coming years large number of players
will have dedicated
fleets.
3. Infrastructural constraints: The infrastructure development has not
kept pace with the
growth in aviation services sector leading to a bottleneck. Huge investment
requirement for
physical infrastructure for airports.
4. Despite rapid growth and entrants of several new players there are
certain issues which are
haunting aviation sector till now. One of them is the deficiencies of airport
infrastructure across
the country. Nearly all the major airports in India are heavily congested and
operating
environments too are inefficient. Though recently new airports built in
Bangalore and Hyderabad
and modernization of Delhi and Mumbai airports have result in relatively
better airport
infrastructure. Also most of airlines have not been able to break even till
now. Unless they
achieve profitability within a short time period some of these airlines will find
it difficult to
compete in this competitive market.
5. Another big obstacle to reaching profitability for Indian airlines is the high
fuel cost. Due to
high sales tax the fuel cost for airlines is sometimes 60% higher than
international price. The
rapid growth has also been resulted in scarcity of resources particularly for
pilots, technical
people, management people and airlines have to depend on the expats
which costs them heavily.
Also India does not have high quality training institutes which can generate
required number of
pilots or technical people.
OPPRTUNITIES
1. Expecting investments: investment of about US $30 billion will be
made.
2. Expected Market Size: Average growth of aviation sector is about 25%-
30% and the
expected market size is projected to grow upto100 million by 2010.
With expansion of tourism business this industry will grow directly
proportional to it.
3. Indian aviation industry is still in nascent stage and further economic
growth will increase
both number of passengers opting for air travels as well as cargo transported
through airlines.
Also India is slowing becoming a tourist destination and the number of
foreign national coming
to India for both tourism and business activities are increasing. India’s
geographical position is
also very suitable for it to become an aviation hub at the cross roads
between Europe/ Middle
East and Asia pacific. Also increasing outsourcing of aerospace design and
manufacturing to
India has been resulted in creation of domestic talents which can be utilized
to grow Indian
aviation sector.
THREATS
Huge investments are expected to take place in aviation sector in near
future. It is estimated that
by 2012.
1. Shortage of trained Pilots: There is a shortage of trained pilots, co-
pilots and ground staff
which is severely limiting growth prospects.
2. Shortage of Airports: There is a shortage of airport facilities, parking
bays,air traffic control
facilities and takeoff and landing slots.
3. High prices: Though enough number of low cost carriers are already
existing in the industry,
majority of the population is still not able to fly to other destinations.
4. One of the biggest threats to Indian airlines particularly in the
international segments is the
entrant of more matured and cost effective foreign airlines. Also the security
issues sometimes
become matter of concern to the air traffics particularly in the international
segment.
SWOT ANALYSIS OF KINGFISHER AIRLINES
STRENGTHS
 Strong brand value and reputation in the minds of customers.
 Quality of the service.
 Route rationalization.
 First airline to have a new fleet of airbuses.
 Quality and continuous innovation.
WEAKNESSES
 Still a not in profit organization.
 High ticket pricing.
 Facing a tough competition from competitor
OPPORTUNITIES
 The expanding tourism industry.
 The non penetrated domestic market.
 International market.
 Untapped air cargo market.
THREATS
 Competitors
 Infrastructure issues.
 Fuel price hike.
 Tourism saturation
 Economic slowdown.
 Promotions and sponsorship declining

STRATEGIC CAPABILITIES
RESOURCES AND COMPETENCE
 A larger-than-life brand image and promises of good times have
helped Kingfisher
Airlines soar.
About Kingfisher Airlines:
 Since its launch carrier in terms of domestic passenger carried, daily
departures (an
average of 383 daily departures), customer service quality and innovation.
 Kingfisher Airlines carried 10.9 million passengers in the financial year
ended 31 March
2009 with a share of 27 per cent of the domestic Indian air travel market. For
the nine
months to 31 December 2009, it carried 8.2 million passengers.
 It is India's only five star airline, as rated by Skytrax, the independent
airline quality
research organisation.
 Besides being the first and only airline in India to offer in-flight
entertainment at every
seat, Kingfisher Airlines offers Live TV with 16 channels. It has received
numerous
awards for innovation, customer responsiveness and was voted the “Best
New Airline of
the Year”, within months of its launch. It covers all segments of air travel –
from low
fares to premium service.
 The airline launched its first international routes in September 2008 and
now serves
oneworld hubs Bangkok, Hong Kong, London Heathrow and Singapore.
Internationally,
it also currently serves Colombo, Dubai and Dhaka. In total, it flies to 70
destinations
worldwide – 63 of them in India – in eight countries, with its main hubs at
Mumbai,
Delhi and Bangalore.
 Kingfisher Airlines’ network has been covered since 1 June 2009 by the
Global Explorer
round-the-world fare offered by all oneworld member airlines and selected
carriers that
are not part of the alliance.
 Its fleet of 66 modern aircraft, with an average age of five years, includes
five Airbus
A330s, eight A321s, 23 A320s, three A319s and 25 ATR 72-500s and two
ATRs. It
employs 7,400 staff.
 During the financial year ended 31 March 2009, it generated revenues
totalling INR55.8
billion (US$1.1 billion), with INR50.9 billion (US$975 million) of that from its
passenger business.
 For the nine months to 31 December 2009, it generated revenues totalling
INR38.2
billion (US$817 million), with INR35 billion (US$753 million) of that from its
passenger
business.
 The 58 destinations across India that Kingfisher Airlines will add to the
oneworld map
include Agartala, Agatti, Agra, Ahmedabad, Aizwal, Amritsar, Aurangabad,
Bagdogra,
Bhavnagar, Bhubaneswar, Bhuj, Calicut, Chandigarh, Coimbatore, Dehradun,
Dharamsala, Goa, Guwahati, Hubli, Imphal, Indore, Jabalpur, Jaipur, Jammu,
Jodhpur,
Kandla, Khajuraho, Kochi, Kolhapur, Kolkata, Kullu, Latur, Leh, Lucknow,
Madurai,
Mangalore, Nagpur, Nanded, Nasik, Patna, Port Blair, Pune, Raipur,
Rajahmundry,
Ranchi, Salem, Sholapur, Silchar, Simla, Srinagar, Tirupati, Trichy,
Trivandrum,
Tuticorin, Udaipur, Varanasi, Vijayawada, and Vishakapatnam.
 Kingfisher Airlines is a part of The UB Group – one of India’s largest
conglomerates
with diverse interests and a global presence. The UB Group is also the
largest Indian
alcoholic beverages (beer and spirits) company and the third largest drinks
group in the
world.
THINGS WHICH CREATED IT A BIG BRAND
 In seven months after the launch KFA has earned Rs 200 crore (Rs 2
billion), flown over
500,000 passengers, grown to a fleet of nine Airbus A320 and expanded
from four flights
a day to 56.
 Equally important, Kingfisher Airlines bagged the third place in this year's
Brand Derby:
64 per cent of those interviewed ranked it the third-most successful brand
launch, while
11 per cent felt it deserved top slot.
 KFA's success carries a simple, yet vital lesson: do your homework. When
the decision to
enter the aviation industry was taken in early 2004, Mallya and his team
knew the going
would be rough.
 The 25-million seats Indian aviation industry was growing at 20 per cent,
but it was on
the backs of the new, low-cost players. Entrenched players like Indian
Airlines and Jet
Airway, too, were slashing ticket prices to cater to the new breed of have-
ticket-willtravel
passengers.
 The challenge for the new airline was to stand out in the crowd, for all the
right reasons.
 So, Kingfisher approached market research agency IMRB to assess a
possible niche.
IMRB interviewed 2,500 frequent air travellers, aged 21-45 years
from SEC A1, A2
and B in the top 15 metros, where air travel markets are strong.
 "The study revealed people wanted a young, trendy, fun and yet
premium product,"
says Girish Shah, head, marketing, KFA.
 The way ahead was clear: extend the Kingfisher brand into aviation, and
focus on the
young business traveller.
 "The challenge was to make the mother brand slightly more serious and
relevant to air
travelers.
 " Backed with an ad budget of Rs 25 crore (Rs 250 million), KFA began its
ad campaign
a few weeks before the launch, booking every possible touchpoint relevant
to the
business traveller.
 Newspaper ads, radio spots, and a presence in upmarket stores like
Westside and
Shoppers' Stop, premium clubs like the Cricket Club of India. . . even with-it
restaurants
like Tendulkar's. Competitions and quizzes with free KFA tickets as prizes
ensured
customer interest.
 In mid-August, KFA launched its second campaign -- "Freedom from boring
air travel" --
to coincide with Independence Day..
 Customer interest was definitely hooked, not least because of Mallya
himself. Media
analysts credit a large part of KFA's success to its flamboyant promoter
and his
directly addressing the press and customers.
 "Kingfisher's is a PR-driven communication instead of a regular,
advertising-driven
communication,". "It's inspired from Virgin, where Richard Branson , too,
focuses more
on PR and value-adds."
 The value-adds have been critical for KFA, too. Attractive cabin
crew in designer
uniforms, gourmet meals and personal screens for each seat add to
the premium
experience.
 On board, passengers watch a safety video featuring model-actress Yana
Gupta and can
then choose from five video channels and 10 radio channels. They are called
"guests" and
given gifts at the end of the flight -- sachets of flavoured tea and umbrellas
during the
monsoon.
 All of which ensured good times for the passenger. But Indians don't like
their good
times to be accompanied by huge price tags, so KFA clubbed its other selling
points with
a biggie -- moderate price points.
 Initially, KFA flights on the crowded Mumbai-Bangalore route were offered
for just Rs
1,999 in a direct bid to lure passengers. Once the fish bit, it was reeled in
with special,
same-day return offers. That was a hit with business travellers, who usually
return within
the day.
 To cast its net wider, KFA then offered special fares for Central
government and defence
personnel and their families. "Kingfisher has conveniently sandwiched itself
between the
upper end of Air Deccan customers and the lower end of Jet Airways, thus
roping in both
the segments,"
 Now it was time to land the catch. KFA managed to bag access to the
Indian Airlines'
terminals at major airports, allowing it to glide past the inevitable delays at
the private
airlines' terminals and ensure timeliness. IA staff was also roped in for the
ground
handling and kitchen duty handed over to Sky Gourmet.
 "Outsourcing functions allows Kingfisher to cut cost and increase
efficiency," Plus,
like low-cost airlines, Kingfisher effectively uses online ticketing, saving up
on travel
agents' commissions.
 All of which adds up to an effective brand. But KFA still has a long way to
fly.
KINGFISHER RED AIRLINE CAPABILITIES
 Kingfisher Red Airlines is a subsidiary of the premier Indian airline
Kingfisher
Airlines.
 The company has designed Kingfisher Red to serve affordable flights to
and
from domestic and international destinations.
 Growing bigger and better each passing year, the airlines has been re
branded
twice. Previously known as Simplifly Deccan, Kingfisher Red Airlines was also
earlier
known as Air Deccan. Air Deccan was picked up by the Kingfisher group from
Deccan
Aviation.
 A part of United Breweries group of Dr. Vijay Mallya, Kingfisher Red
Airlines
came about when Kingfisher acquired a major stake in Deccan Aviation, the
holding
company of Air Deccan.
 The company has been relocating, reorganizing and speckling their
carriers in
dazzling red since, to become a favourite among budget friendly fliers.
 Kingfisher Red Airlines has its major headquarter at HAL Bangalore
International Airport. The airline is one of the pioneers to provide cheap
airfares to
domestic and international fliers in the economy class.
 Even so, they have also been successful in maintaining standards on board
and in
attracting more clientele with their comforting in-flight services and
specialized features.
 The secondary hub for the airlines is at Chennai International Airport,
making it
a convenient and accessible option for clients in South India.
 Connectivity
 Kingfisher Red has flights to 64 varied destinations within India. Important
destinations
covered by the airline are Delhi, Jaipur, Mumbai, Bangalore, Srinagar,
Ahmedabad,
Ranchi, Kolkata, Guwahati, Bhopal, Hyderabad, Goa, Chennai, Coimbatore,
and Port
Blair. Operating about 337 flights daily, Kingfisher Red is gaining popularity
because of
their scheduled flights, their reach to important destinations, and their in-
flight services.
BIGGEST ACHIEVEMENT FOR KINGFISHER WHICH
ADDS
TO ITS RESOURCES.
 Oneworld brings together some of the best and biggest names in the
airline business -
American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan
Airlines, LAN,
Malév Hungarian Airlines, Mexicana, Qantas and Royal Jordanian, and around
20
affiliates including American Eagle, Dragonair, LAN Argentina, LAN Ecuador
and LAN
Peru.
 Russia’s S7 Airlines will join the alliance in 2010 with Kingfisher now on
track to follow
during 2011. Between them, these airlines:
• Serve 800 airports in nearly 150 countries, with some
9,000 daily departures.
• Offer nearly 550 airport lounges for premium customers.
• Carry some 340 million passengers a year on a fleet of
almost 2,500 aircraft.
• Generate more than US$100 billion annual revenues in
total.
 It is the only alliance with any airlines based in South America, Australia or
Asia’s
Middle East.
 The alliance enables its members to offer their customers more services
and benefits than
any airline can provide on its own.
 These include a broader route network, opportunities to earn and redeem
frequent flyer
miles and points across the combined oneworld network and more airport
lounges.
oneworld also offers more alliance fares than any of its competitors.
 Oneworld was voted the World's Leading Airline Alliance for the seventh
year running
in the latest (2009) World Travel Awards. It is the only winner of this award
since it was
introduced in 2003.
 India’s leading domestic carrier and only five-star airline, Kingfisher
Airlines, is lining
up to join oneworld after signing a memorandum of understanding as its first
step
towards full membership of the world’s leading quality airline alliance,
subject to Indian
regulatory approval.
 The agreement was concluded at a meeting between Kingfisher Airlines’
Chairman Vijay
Mallya and Chief Executives from oneworld’s 11 existing member airlines,
which
include some of the best and biggest names in the industry.
 Kingfisher Airlines today applied to India’s Ministry of Civil Aviation for
authority to
proceed with its membership of oneworld.
 Kingfisher Airlines’ addition to oneworld will link India’s most extensive
domestic
network with oneworld’s unrivalled global network, as the only alliance with
airlines
based on every continent. It will add 58 cities to the oneworld map – all of
them in India.
 This will expand oneworld’s network to 800 destinations in almost 150
countries, served
by a combined fleet of 2,350 aircraft operating some 9,000 flights a day,
carrying some
340 million passengers a year.
 Established oneworld members American Airlines, British Airways, Cathay
Pacific,
Finnair, Japan Airlines, Qantas and Royal Jordanian already serve five
gateways in India
between them – Bangalore, Chennai, Delhi, Hyderabad and Mumbai.
 British Airways will support Kingfisher Airlines through its alliance
implementation
programme, as its oneworld sponsor.
 Kingfisher Airlines Chairman and Chief Executive Vijay Mallya said:
“Kingfisher
Airlines is proud to be lining up to join the world’s leading quality global
airline alliance.
 Becoming part of oneworld would be one of our most significant steps so
far - and is
right in line with our vision to become one of the world’s top airlines.
 It will enable us to offer our guests a truly global network served by
partners who include
some of the best known and most admired airlines in the world, with
frequent flyer
benefits extended throughout this network.
 It will also strengthen us financially, through revenues from passengers
transferring to
our network from our oneworld partners and the cost reduction opportunities
the alliance
offers.”
 Willie Walsh, Chief Executive of British Airways, oneworld’s sponsor of
Kingfisher
Airlines, said: “Kingfisher Airlines is an ideal fit for oneworld. It has a strong
focus on
customer service and its network expands what the alliance
currently offers.
oneworld’s priority is the quality rather than quantity of our member airlines,
which is
why British Airways is delighted to be developing our relationship with
Kingfisher
Airlines further by acting as its sponsor into the alliance.”
 Kingfisher Airlines will fill one of oneworld’s few remaining membership
spaces with
a carrier that matches our alliance’s demanding requirements,
benefiting customers
by expanding our global reach and helping us ensure oneworld remains the
pre-eminent
global alliance with members unmatched in brand and service quality.”
RESOURCES COMPETENCES
THRESHOLD
CAPABILITIES
It has matched with all the
minimum capabilities i.e from
finances to aircraft to enter in
the industry and required to be
in the industry
It is registered company which
meets all the safety and other
issues to continue to be in
business.
CAPABILITIES FOR
COMPETITIVE
ADVANTAGE
UNIQUE RESOURCE
- High focus on
customer satisfaction.
- Strong financial back
up
- Tie up with one world
for targeting the
international routes.
- Coverage of maximum
numbers of domestic
routes.
- Celebrity association
- Luxury and comfort
- Strong PR directly
addressing the
customers.
- Strong marketing stg.
CORE COMPETENCE
- Strong brand value
- Flamboyant image of
airline
- Finance
- Unique service
experience.
PHYSICAL AND FINANCIAL RESOURCES
 Kingfisher Airlines is an airline group based in India. Through its parent
company
United Breweries Group, has a 50% stake in low-cost carrier Kingfisher Red.
 Kingfisher Airlines is one of the seven airlines to be ranked as a 5-star
airline by the
independent research consultancy firm Skytrax Kingfisher operates more
than 375 daily
flights to 71 destinations, with regional and long-haul international services.
 In May 2009, Kingfisher Airlines carried more than a million passengers,
giving it the
highest market share among airlines in India
 Kingfisher Airlines, India’s fastest growing airline and the first Indian
carrier to offer Full
Service at True Value today has placed an order for 20 ATR72-500 Aircraft at
the Dubai
Air Show in a deal valued at US $350 million.
 The order represents the first addition of regional aircraft to the fleet of
Kingfisher
Airlines. 20 Aircraft are on firm order with options for another 15.
 It has four new Airbus A320-200s airlines also.
HUMAN RESOURCES
Prior to launch, KFA signed a “non-poaching alliance” with Air Deccan under
which both the
airlines agreed not to hire each other’s employee. KFA’s flight attendants
called “Flying models”
were selected through a national level model contest.
KFA also stressed the fact that its employees had to be capable enough to
meet the airlines’ high
service standards.
Among one of the biggest HR move for KFA was addition of Nigel Harwood as
Chief Operating
Officer with effect from August 1, 2005, to strengthen its management team.
Mr. Mallya said “Kingfisher Airlines Limited has a first class management
team not just at top
most level but also in the second line. This is part of the UB group’s
commitment to human
resources”.
Kjglg
VALUE OF STRATEGIC CAPABILITIES
 Kingfisher has been able to create a successful brand only because of the
value which it
has to offer to its customers.
 Customers have opted for kingfisher for the premier level of services
provided.
 Attractive cabin crew in designer uniforms, gourmet meals and
personal screens for
each seat add to the premium experience.
 It is a young, trendy, fun and yet premium product to which
customers look upon.
 Hence customers have attached value to its strategic capabilities.
 Kingfisher Airlines is among the most renowned airline companies this is
one of the
fastest growing airline, which has its bas in Mumbai.
 The ownership of the Kingfisher Airlines is leadership of Dr. Vijay Mallya
and is under
the United Beverages Group.
 This Airline has a Kingfisher bird as its logo due to which it can be
distinguished from
other airlines quiet easily.
 The logo of the flight is of red, blue and green colours. This is the one of
the most
important Indian luxury airline with an extensive network which spreads to
more than 30
destinations.
 The trained staff never fails to fulfil the requirement of the passengers
which make their
journey pleasurable.
 The chief component of Kingfisher flights is the entertainment system
which one can
avail.
 This popular Airlines has beautiful interiors and the brightly dressed staff
which provide
courteous services to the passengers at low rates.
 The interiors of this flight offer to you world of luxuries and one can avail
cheap
discounted rates all the year round.
 The passengers can book the tickets online and avail the benefits which
are given by the
company from time to time. All details related to Flight schedules and status
is mentioned
on the web.
 Kingfisher started its operations on 9th May2005 with 4 Airbus aircraft
which were taken
on lease. This company was launched by the business tycoon Vijay Mallya
with the
motive of making it number one airline company in India.
 This was the first Indian airline to start its operations with all new aircrafts.
Beyond any
doubts we now see Kingfisher Airlines to be the best in Indian aviation
industry.
In India the flights of Kingfisher Airlines fly to numerous destinations like
Ahmadabad,
Bangalore, Chennai, Delhi, Mumbai, Hyderabad, Kolkatta, Mangalore and
many others.
Kingfisher airline at present operates with 11 brand new aircrafts, everyday
there are
there 70 flights which cover around 16 important key destinations in India.
 The airline also provides you with ample of entertainment facilities which
include on
demand audio and television shows which are played on LCD monitors. The
most
commendable quality of Kingfisher Airline is that it offers all services in the
most
affordable price.
RARITY OF STRATEGIC CAPABILITIES
 Kingfisher has been able to create a rarity in terms of service level.
 It has also achieved to qualify in oneworld group which has given it an
extra edge over
all the other Indian airline.
 Oneworld brings together some of the best and biggest names in the
airline business -
American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan
Airlines, LAN,
Malév Hungarian Airlines, Mexicana, Qantas and Royal Jordanian, and around
20
affiliates including American Eagle, Dragonair, LAN Argentina, LAN Ecuador
and LAN
Peru.
 Russia’s S7 Airlines will join the alliance in 2010 with Kingfisher now on
track to follow
during 2011. Between them, these airlines:
• Serve 800 airports in nearly 150 countries, with some
9,000 daily departures.
• Offer nearly 550 airport lounges for premium customers.
• Carry some 340 million passengers a year on a fleet of
almost 2,500 aircraft.
• Generate more than US$100 billion annual revenues in
total.
 It is the only alliance with any airlines based in South America, Australia or
Asia’s
Middle East.
 The alliance enables its members to offer their customers more services
and benefits than
any airline can provide on its own.
 These include a broader route network, opportunities to earn and redeem
frequent flyer
miles and points across the combined oneworld network and more airport
lounges.
oneworld also offers more alliance fares than any of its competitors.
 Oneworld was voted the World's Leading Airline Alliance for the seventh
year running
in the latest (2009) World Travel Awards. It is the only winner of this award
since it was
introduced in 2003.
 India’s leading domestic carrier and only five-star airline, Kingfisher
Airlines, is lining
up to join oneworld® after signing a memorandum of understanding as its
first step
towards full membership of the world’s leading quality airline alliance,
subject to Indian
regulatory approval.
 The agreement was concluded at a meeting between Kingfisher Airlines’
Chairman Vijay
Mallya and Chief Executives from oneworld’s 11 existing member airlines,
which
include some of the best and biggest names in the industry.
 Kingfisher Airlines today applied to India’s Ministry of Civil Aviation for
authority to
proceed with its membership of oneworld. .
 Kingfisher Airlines’ addition to oneworld will link India’s most extensive
domestic
network with oneworld’s unrivalled global network, as the only alliance with
airlines
based on every continent. It will add 58 cities to the oneworld map – all of
them in India.
 This will expand oneworld’s network to 800 destinations in almost 150
countries, served
by a combined fleet of 2,350 aircraft operating some 9,000 flights a day,
carrying some
340 million passengers a year.
 Established oneworld members American Airlines, British Airways, Cathay
Pacific,
Finnair, Japan Airlines, Qantas and Royal Jordanian already serve five
gateways in India
between them – Bangalore, Chennai, Delhi, Hyderabad and Mumbai.
 British Airways will support Kingfisher Airlines through its alliance
implementation
programme, as its oneworld sponsor.
 Kingfisher Airlines Chairman and Chief Executive Vijay Mallya said:
“Kingfisher
Airlines is proud to be lining up to join the world’s leading quality global
airline alliance.
 Becoming part of oneworld would be one of our most significant steps so
far - and is
right in line with our vision to become one of the world’s top airlines.
 It will enable us to offer our guests a truly global network served by
partners who include
some of the best known and most admired airlines in the world, with
frequent flyer
benefits extended throughout this network.
 It will also strengthen us financially, through revenues from passengers
transferring to
our network from our oneworld partners and the cost reduction opportunities
the alliance
offers.”
 Willie Walsh, Chief Executive of British Airways, oneworld’s sponsor of
Kingfisher
Airlines, said: “Kingfisher Airlines is an ideal fit for oneworld. It has a strong
focus on
customer service and its network expands what the alliance
currently offers.
oneworld’s priority is the quality rather than quantity of our member airlines,
which is
why British Airways is delighted to be developing our relationship with
Kingfisher
Airlines further by acting as its sponsor into the alliance.”
 Kingfisher Airlines will fill one of oneworld’s few remaining membership
spaces with
a carrier that matches our alliance’s demanding requirements,
benefiting customers
by expanding our global reach and helping us ensure oneworld remains the
pre-eminent
global alliance with members unmatched in brand and service quality.”
 Hence this has became a rare resource for kingfisher.
ROBUSTNESS OF STRATEGIC CAPABILITIES
COMPLEXITY :- the
complexity is formed due
to inter linkage of external
PR activities,
advertisement,
flamboyancy with internal
backup of excellent service
level which is rare.
ROBUSTNESS
The culture at kingfisher
is made up of excellent
hard working employees
who are courteous and
yet flamboyant which is
rare.

BUSINESS LEVEL STRATEGIES

BASES OF COMPETITIVE ADVANTAGE:
THE STRATEGIC CLOCK
Kingfisher airlines fall in route 5 that is focused differentiation. The
prices of air tickets of
kingfisher airlines are comparatively higher than other airlines but services
rendered are different
and excellent.
Justification:
 Kingfisher, offer a great flying experience. Everything about Kingfisher
Airlines is
designed to make one feel good. It starts from the airport itself. A red carpet
in front of
the Kingfisher Airlines counter. Staff to take away luggage and do the entire
scanning,
checking, etc. The planes, the seats, and the food everything is definitely
superior. One
walks out of a Kingfisher flight feeling "good".
 It has an up market image. It projects the colorful image with red carpet,
young & smart
attendants, music & other accessories etc. Low cost airlines on the other
hand are players
like air Deccan & spicejet. These totally thrive on price as their competitive
edge.
Kingfisher is targeting those customers that are ready to pay a bit extra for
comfort.
 Kingfisher airlines are the only domestic airline that has its standard
equivalent to
international standards.
 Vijay Malaya has always use celebrities to have his medium to deliver his
products to the
customers.
 Its promotion strategy of its swimsuit calendars, parties has been its
strategy to
concentrate the youths.
 It’s the only airline having service of home delivery of tickets.
ACHIEVEING COMPETITIVE ADVANTAGE:
SUSTAINING COMPETITIVE ADVANTAGE:
PRICE BASED STRATEGY
 Initially Kingfisher airlines did not differentiate between business class and
economy
class. But eventually they decreased the prices of business class and called
those seats as
premium seats. Fares were very average as it had to target middle class as
well as
premium class people.
 The introduction of Kingfisher Red services have given the airline a ‘Low-
Cost’ option
to compete with other ‘No-frills’ airlines. It is important to note that the
Kingfisher Red
serves complementary meals on board, thereby increasing the perception of
‘More Value
for Money’ for the passengers.
DIFFERENTIATION
 Initially Kingfisher airlines did not differentiate between business class and
economy
class. But eventually they decreased the prices of business class and called
those seats as
premium seats. Fares were very average as it had to target middle class as
well as
premium class people. The introduction of Kingfisher Red services have
given the airline
a ‘Low-Cost’ option to compete with other ‘No-frills’ airlines. Kingfisher Red
serves
complementary meals on board, thereby increasing the perception of ‘More
Value for
Money’ for the passengers.
 Passengers are offered in flight entertainment options and contests like
‘Kingfisher
Flying Face of the Month' and attractive discounts of branded merchandise.
 The company has just launched Kingfisher First, which is a print campaign
to promote
its first class service. It is a personalized campaign, which has Vijay Malaya,
signing
off by saying, "I have created a product which is better than what I would
have created
for myself."
 This has created difficulties if imitation as the strategies are personalized.
COMPETITION AND COLLABORATION:
 Kingfisher and Jet Airways has decided to share facilities to cut costs. It is
not an exact
Mergers or an Acquisitions. It is collaboration. The seller’s power would be
high here.
These are the things they will be doing:
1. Manage fuel expenses jointly
2. Share some pilots
3. Cross-selling of tickets
4. Sharing training facilities
5. Accepting each other’s frequent flier miles.
 This collaboration will help the customers too. Increased counters to get
tickets. One can
use the frequent fliers one has earned for destinations, which were not
available earlier.
They don’t find any good competitor who will enter the market. More
consolidation
means fewer players and hence the monopoly. If a player controls more than
50% of the
market then consumers lose. They will not have a bargain because there is
no
competition.
 The company is getting into collaboration with its competitors to cut costs
and improve
operations because cost is the major issue in airline industries in order to
increase profits
and operational efficiencies.

CORPORATE LEVEL AND

INTERNATIONAL STRATEGY
KINGFISHER AIRLINES
Introduction to UB group
UB group based in Bangalore, is a conglomerate of different companies with a major
focus on the
brewery (beer) and alcoholic beverages industry. The company markets most of its
beer under the
Kingfisher brand. The group is headed by Dr Vijay Mallya. The UB Group was
founded by a Scotsman,
Thomas Leishman in 1857. Kingfisher, the Group's most visible and profitable
brand, made a modest
entry in the sixties. During the 1950's and 60's, the company expanded greatly by
acquiring other
breweries. First was the addition of McDowell as one of the Group subsidiaries, a
move which helped
United Breweries to extend its portfolio to wines and spirits business. Strategically,
the Group moved into
agro-based industries and medicines when Mallya acquired Kissan products and
formed a long-term
relationship with Hoechst AG of Germany to create the Indian pharmaceutical
company now known as
Aventis Pharma, the Indian subsidiary of the global pharma major Sanofi-Aventis.
The UB Group’s
Brewing Entity - called United Breweries Limited (UBL) - has also assumed
undisputed market
leadership with a national market share in excess of 50%. Through a process of
aggressive acquisition and
market penetration, The UB Group today controls 60% of the total manufacturing
capacity for Beer in
India.
Hence the UB group has been expanding and diversifying in development of
products beyond the current
expertise. Hence we can say that the UB group is unrelated diversified.
Kingfisher Airlines : Introduction
Kingfisher Airline is a private airline based in Bangalore, India. The airline is
owned by the
United Beverages Group. Kingfisher Airlines started its operations on 09 May
05 with a fleet of
4 Airbus A320 aircrafts. The major destinations covered by Kingfisher Airlines
on domestic
routes are Bangalore, Mumbai, Delhi, Goa, Chennai, Hyderabad, Ahmedabad,
Cochin,
Guwahati, Kolkata, Pune, Agartala, Dibrugarh, Mangalore and Jaipur.
It is a major Indian luxury airline operating 400 flights a day and has an
extensive network to 37
destinations, with plans for regional and long-haul international services. It
has announced plans
to start flights to the USA with Airbus A380 aircraft. Its main bases are
Bangalore International
Airport, Bangalore, Chhatrapati Shivaji International Airport, Mumbai and
Indira Gandhi
International Airport, Delhi, with a hub at Sardar Vallabhbhai Patel
International Airport,
Ahmedabad. Kingfisher Airlines, through one of its holding companies United
Breweries Group,
has acquired 26% stake in the budget airline Air Deccan and has option to
buy further of 20%
stake from the secondary market.
Promotion:
Various promotional strategies have been adopted by Kingfisher airlines like
the following:
a. The 'Power Flyer' a consumer incentive offer targeted at the corporate
traveller
b. Passengers are offered in flight entertainment options and contests like
‘Kingfisher Flying Face of the Month' and attractive discounts of branded
merchandise.
c. Offer in-flight silent auctions for lifestyle products and in-flight sales of dry
packaged food and beverages.
d. The marketing department showcased the airlines as ‘The new flying
experience’.
e. Kingfisher Airlines has announced special fares for all personnel serving in
the
Indian Armed Forces, the Union Government, State governments, and
employees of all public sector units in the country. The immediate families of
these personnel are also eligible for these concessions.
f. The company has just launched Kingfisher First, which is a print campaign
to
promote its first class service. It is a personalized campaign, which has Vijay
Mallya, signing off by saying, "I have created a product which is better than
what I would have created for myself."
Need for International Diversity:
Kingfisher Airlines, one of India's largest domestic carriers, launched its
international service
with daily flights to Europe and Southeast Asia and the US .
Non-stop flights from Bangalore and Mumbai to London, and from Mumbai to
Hong Kong and
Singapore.
The India-to-London flight reaches the British capital after lunch around 2.30
pm GMT, and the
return flights will be overnight journeys beginning around 10 pm GMT.
A unique non-stop flight from Bangalore to San Francisco is planned for
September or October,
along with a flight to New York, either non-stop or one-stop.
The Bangalore-San Francisco non-stop flight is a no-brainer because it
connects the two silicons
- the Silicon Plateau and the Silicon Valley with an Airbus A330-200 aircraft
recently acquired
by Kingfisher Airlines and displayed at the Farnborough air show.
The biggest and the best software companies from the San Francisco Bay
area have large
operations in Bangalore and there is a huge amount of traffic. That's one
sector in the (aviation)
industry that hasn't been affected by rising oil prices or the slowing
economy.
Kingfisher has convenient landing and take-off slots for all the sectors.
The success of Kingfisher's international service is pinned heavily on demand
for foreign travel
among Indians sustaining through an economic downturn and rising prices.
Hence the
globalization and the international business, Kingfisher diversified diversely.
Kingfisher Airlines were forced to raise prices due to the rises in the price of
fuel but
surprisingly they had not seen any reduction in thier load-factor, which
reinforces our belief that
when people pay more they demand higher standards of quality, which
Kingfisher Airlines is
able to deliver.
MARKET SELECTION AND ENTRY AND
INTERNATIONAL
VALUE NETWORK:
Kingfisher airlines launched its domestic air service operations in May
2005.KFA was promoted
by UB group and offered a single class- “Kingfisher Class”. KFA successfully
leverage the
youthful and vibrant image of its kingfisher beer brand and called its airlines
as ‘Funliners’ to
emphasize the fun-filled experienceKFA started its operation in May 7, 2005,
positioning itself
as a budget carrier and not as Low Cost Carrier (LCC).
Kingfisher is one of only 6 airlines in the world to have a 5 star rating from
Skytrax, along with
Asian Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and
Cathay Pacific
Airways.
In a short span of time Kingfisher Airline has carved a niche for itself. The
airline offers several
unique services to its customers. These include personal valet at the airport
to assist in baggage
handling and boarding, exclusive lounges with private space, accompanied
with refreshments
and music at the airport, audio and video on-demand, with extra-wide
personalized screens in the
aircraft, sleeperette seats with extendable footrests, and three-course
gourmet cuisine.
An on-board chef and business class seats will come with head-to-toe
massagers and Bose
headphones.Economy class passengers will be served business class meals
and have access to
web-chat and email services
The following are the major attributes of the Airline:
Visio n
“The Kingfisher Airlines family will consistently deliver a safe, value-based
and enjoyable travel
experience to all our guests.”
Values :
Safety: This is an overriding value. In this line of business, there is no
compromise.
Service: In hospitality business customer satisfaction is very important and
building trust,
goodwill and loyalty of customers is at prime focus.
Happiness: Kingfisher seeks to build an organisation with people who
choose to be happy, and
will endeavour to influence their guests and co-workers to be happy too.
Teamwork: Kingfisher believes that “We will succeed or fail as a team. Each
one of us must
respect our colleagues regardless of their rank, and we must work together
to ensure our mutual
success”.
Accountability: Every employee in Kingfisher will be held accountable for
the successful
execution of their duties, commitments and obligations, and they will strive
to lead by an
example.
Product: Premium class seats
 Sleeperette seats with extendable footrests. 48" seat pitch and a 125°
recline. Fullyadjustable
headrests.
 Laptop and mobile phone chargers in each seat.
 Comfortable pillows and snug blankets.
Price :
Initially Kingfisher airlines did not differentiate between business class and
economy class. But
eventually they decreased the prices of business class and called those seats
as premium seats.
Fares were very average as it had to target middle class as well as premium
class people. The
introduction of Kingfisher Red services have given the airline a ‘Low-Cost’
option to compete
with other ‘No-frills’ airlines. It is important to note that the Kingfisher Red
serves
complementary meals on board, thereby increasing the perception of ‘More
Value for Money’
for the passengers.
Fleet:
Kingfisher airlines has a fleet of 11 brand new A320 family aircrafts and has
a route connecting
15 key business and holiday destinations with more than 70 flights across
India every day.
Chairman Vijay Mallya himself guarantees an experience like never before,
and each member of
the kingfisher family takes accountability of the exertion of services in the
right manner.
Hence from the above attributes we can say that Kingfisher Airlines entered
with a focus to cater
the premium class and middle class customers with premium level of
service. These kind of
unique service features is not being offered by any of the local Airlines.
MARKET SHARE REVIEW: PERFORMANCE
(a) Kingfisher:26.08 %
(b) Jet Airways:16.72 %
(c) Jetlite:
7.39 %
(d) Air India: 17.66 %
(e) Indigo: 13.75 %
(f) Spicejet: 11.72 %
(g) Go Air: 4.29 %
(h) Paramount: 2.27 %
Kingfisher Airlines - Strategies
Kingfisher airlines launched its domestic air service operations in May
2005.KFA was promoted
by UB group and offered a single class- “Kingfisher Class”. KFA successfully
leverage the
youthful and vibrant image of its kingfisher beer brand and called its airlines
as ‘Funliners’ to
emphasize the fun-filled experience. Within the first six months of its launch,
KFA managed to
corner a 6% market share in the domestic air travel mark.
KFA started its operation in May 7, 2005, positioning itself as a budget carrier
and not as Low
Cost Carrier.
Following strategies were followed to make it one of the leading Airlines in
India.
• It came up with a very appealing promotional line “Fly the good times” and
it reflected in
the experience the company offered to its passengers.
• KFA is also launched Kingfisher express in order to tap into the growing LCC
segment.
• It planned to re-launch its commercial air service called UB Airway again
which it had to
withdraw it due to government restrictions.
• The company gave best services to its customers that were like providing
world class
interiors, and in-flight entertainment systems.
• The company came up with only one class airlines rather than other airlines
that had
Business Class; Economy Class the idea was to combine Business Class
experiences and
Economy Class experiences in one.
Having a single class freed up more leg space for passengers when
compared to normal economy
class flights.
• The company started addressing its customers as “GUEST” rather than
passengers.
• The company made its mark by providing its guests with more legroom and
bigger seats
so as to provide better comfort.
KFA has set its sight to become India’s largest airline both is capacity and in
market share.
KFA’s Promotional Strategies
As part of its promotional strategy the marketing team of KFA showcased the
airline as “the new
flying experience”. The following initiatives were taken as part of its
promotional strategy…
 Advertisements hoardings at airports depicted the stylish interiors of the
“Funliners”,
which conveyed youthfull, fun-filled, and world class image.
 INOX multiplexes in Mumbai publicized KFA’s special offers for a month.
 KFA was the official travel airlines for the cast and crew of “Mangal
Pandey”- the movie.
 KFA made use of various fashion shows, celebrity golf matches, New Year
parties all to
build its “Kingfisher” brand.
 The UB groups monthly magazine called “Pegasus” published information
about KFA
along with other information related to UB group.
 KFA launched many attractive offers to promote its sales like the “King
Card” in
association with ICICI Bank, in August 2005. This was ment to creat loyal
customers for
KFA by providing benefits like privileged access to lounges, restaurants, free
refreshments at airports, access to 180 golf clubs across India, special invites
for lifestyle
shows .
 In October, KFA launched “Chill Times Offer” in the month of August
2005 and
September 2005.
 In October they launched the “King Saver Offer” which said “Fly like a
King, don’t
play like one”.
 KFA targeted the frequent fliers business traveler segment, which was
dominated by Jet
Airways. By offering a “King Saver Booklet”, This booklet contained six
free flight
tickets and was presented as a free gift if the passenger bought two such
booklets each
worth Rs. 26,999.Passengers could avail off this offer if they showed there Jet
Privilege
Member (Gold or Platinum) card.
Financial strategies:
KFA came up with many new financial strategic moves that made it one of
the leaders of
aviation industry the company had adopted following strategies:
• It purchased brand new A320 aircrafts powered by the cockpit that was a
paperless
environment.
• In June 2005 KFA planned to order US$5 bn at the Paris Air Show, for 5 new
A350-800
aircraft, and five A330-200 aircraft.
• KFA was first Indian carrier to place an order for A380s.
• In November 2005 it placed an order for 30 A 320 and 20 ATR72-500
aircraft at the
Dubai Air Show. This ATR72-500 was worth US$750.
To further its expansion plan KFA put in its bid to buy Sahara in November
2005.How ever
negotiation came to a standstill when KFA felt the valuation of Sahara
Airlines of around
US$750mn to US$1 bn. was too high.
KFA has plans to make an Initial Public Offer (IPO) and raise around US$200
mn that would be
used for its fleet acquisition and route expansion activities.
KFA set up Kingfisher International Inc. (KII), a subsidiary in US for its
international
operations. KFA plans to operate international routs by end of 2007. But KFA
had yet to receive
permission from the Indian government.
According to Indian government domestic air carriers are not allowed to fly
international routes
without five year of domestic flying experience. But Mr. Mallya said if he
failed to convince the
government to change its rules, it would start an airline in a foreign country
and fly it to India.
Human Resource Strategies
Prior to launch, KFA signed a “non-poaching alliance” with Air Deccan under
which both the
airlines agreed not to hire each other’s employee. KFA’s flight attendants
called “Flying models”
were selected through a national level model contest.
KFA also stressed the fact that its employees had to be capable enough to
meet the airlines’ high
service standards.
Among one of the biggest HR move for KFA was addition of Nigel Harwood as
Chief Operating
Officer with effect from August 1, 2005, to strengthen its management team.
Mr. Mallya said “Kingfisher Airlines Limited has a first class management
team not just at top
most level but also in the second line. This is part of the UB group’s
commitment to human
resources”.
Awards and Recognition:
Within a short span of four years, Kingfisher Airlines has received many
international and
national awards.
Award is Presented by the highly acclaimed Business Daily, Economic Times,
Business World,
NDTV.
• India's No. 1 Airline in customer satisfaction - Business World
• NDTV Profit Business Leadership Award for Aviation - Kingfisher Airlines
awarded by
NDTV.
• Brand Leadership Award - in the service and hospitality segment against
several
acclaimed hotels, leading banks and other airlines.
• Economic Times Avaya Award 2006 for Excellence in Customer
Responsiveness - The
prestigious
• Rated amongst India's most respected companies - Business World.
• Rated amongst India’s 25 Innovative Companies - Survey conducted by
Planman Media.
• The Best Airline and India’s Favourite Carrier - In a Survey conducted by
IMB for The
Times Of India.
• Buzziest Brands of 2005 - Ranked amongst the Top Ten buzziest brands of
2005 & 2006
across product categories, in the survey conducted by agencyfaqs.com and
Brand
Reporter.
• Best New Airline of the Year - Centre for Asia Pacific Aviation (CAPA) Award
in the
Asia - Pacific and Middle East region.
• Rated amongst Top Ten Internet Advertisers - Yahoo India.
• Rated amongst the top ten in the Best Television Commercial Jingles -
NDTV.
GROWTH SHARE or BCG Matrix:
Ever since the aviation sector opened up the skies to private carriers, air
passenger travel in India
has been expanding at about 25% a year. The Airline industry has
experienced a drastic increase
in number of passengers, driven by privatization of aviation industry and
introduction of low cost
carriers like Deccan Airlines, Go Air, and Spice Jet etc.
India is one of the fastest growing aviation markets in the world. The Airport
Authority of India
(AAI) manages a total of 127 airports in the country, which include 13
international airports, 7
custom airports, 80 domestic airports and 28 civil enclaves. There are over
450 airports and 1091
registered aircrafts in the country.
Hence the Indian aviation market is on a boom. The estimated growth of
domestic passenger
segment is at 51% per annum and growth for international passenger
segment is 26%, moreover
Kingfisher Airlines in leading at No. 1 with market share of 26.08%. Hence we
can analyze KFA
as Stars in the BCG matrix.
Public Sector Portfolio Matrix:
KFA here in this matrix will come under the Golden Fleece, as its ability to
serve is high and the
public support and funding attractiveness is low.

DIRECTIONS AND METHODS

OF
DEVELOPMENT
ANSOFF”S PRODUCT/MARKET MATRIX
MARKET PENETRATION:
 It is trying to harp on the foreign player’s weakness who lack in Indian
values and
traditions.
 Showing customers additional benefits along with the primary benefits.
PRODUCT DEVELOPMENT:
 KFA is also launched Kingfisher express in order to tap into the growing
LCC segment.
 The company made its mark by providing its guests with more legroom
and bigger seats
so as to provide better comfort.
 The company gave best services to its customers that were like providing
world class
interiors, and in-flight entertainment systems.
 The company came up with only one class airlines rather than other
airlines that had
Business Class; Economy Class the idea was to combine Business Class
experiences and
Economy Class experiences in one.
MARKET DEVELOPMENT:
 Kingfisher is now aiming to target the senior citizens as their one of target
audience in
order to provide extra discounts and facilities.
 It is trying to aim even the first time as well as more repeated customers
to give them
additional benefits.
 Loyalty and frequent flyer programs are planned.
DIVERSIFICATION:
 It is planning to go for international services. (Flight services).
TOWS MATRIX
SO (strength used to take advantage of opportunity)
 As Vijay Malaya has the brand value and reputation in minds of consumers
it can take
advantage of this and hit the places where, the customer income is
increasing and can
they can afford to fly in this airline.
 Quality of service and continuous innovation is the strong factor to capture
the market in
large size. E.g. First airline to have a new fleet of airbuses.
WO (taking advantage of opportunity to overcome
weakness)
 The increasing tourism industry can be targeted and taken advantage of.
 Kingfisher Red can cater to more customers as its prices are less.
 It is still not counted as a profit organization as its ticket prices are fairly
high which is
not affordable by customers and so the prices of this should be reduced.
 The competition it is facing is much high which is hampering its growth as
a whole.
ST (use strengths to avoid threats)
 The fuel price hike is one of the greatest fears and the organization has
overcome this by
its collaboration as stated above.
 It can do contracts with pilot training institutes as there is shortage of
pilots.
 Services given can be increased or given at discounted prices.
WT (minimize weakness and avoid threats)
 Horizontal integration can be done in order to save oneself from price war
and intensive
competition.
INTERNAL DEVELOPMENT:
 The best services with unique features were provided to the customers.
 Better route plans.
 The new comfortable seats.
 Non-stop international flights.
 Enhanced service level.
 First Airline Company to order Airbus.
 Providing better flying experience.
BEBEFITS OF MERGER :
The economic recession was taken an an opportunity. Looking at
dramatically changed world
scenario and a pool of about 2.5 billion people, who are potential fliers in
both India and China.
Expected savings of about Rs 300-400 crore (Rs 3-4 billion) annually to
accrue because of the
synergies achieved due to the merger. An increase in the revenue through
reduction in costs
would follow because of the operation of an airline that will have about 600
flights a day. The
resultant negotiation power and costs saved in fuel and maintenance will be
the added benefits.
An increase of Rs 300-400 crore in the first six months in the bottom line
once we launch the
international operations.
The main idea was to increase revenues on every flight the take-off and
increasing capacity and
not pricing. The implementation of network strategy and good understanding
of the customers
were implemented to increase the revenue.

ORGANIZING FOR SUCCESS

Structure
Processes
• Fare options/Booking options/Home delivery
We are committed to making our tickets easily available to our Guests.
Kingfisher Airlines
tickets can be purchased by:
o Calling up our Call Centers
o The Kingfisher Airlines website (www.flykingfisher.com)
o The Home Delivery option
o Through the Travel Agents
We follow a dynamic fare policy and the fare levels fluctuate depending on
the number of
bookings made / anticipated on a particular flight.
It is our commitment to our Guests that at any given point of time the lowest
available fare at
that time would be made available on all booking mediums. In case a lower
fare level is
available after a Guest has made his booking, a rebooking will be allowed on
the lower fare
level after paying a seat release charge. Our fares are quoted in Indian
Rupees and in US
Dollars. Our International guests can book and make payments through their
credit card.
• Amendments and Cancellations
We understand that our Guest could be in a situation where they have to
amend or cancel their
tickets. At Kingfisher Airlines our Guests can amend or cancel their tickets up
to one hour before
the scheduled departure of the flight. For details of cancellation and seat
release charges please
see the Conditions of Carriage section.
• Keeping you informed
At Kingfisher airlines we are committed to keep our Guests informed in case
of known delays,
cancellations and diversions as early as possible. We use the contact details
in your reservation
record to update you or if you have made the reservation through a travel
agent we attempt to
contact him in case your contact number is not available in our
records.Guests can also receive
the latest flight information using our Kingmobile service by sending a SMS,
eg. SMS KING to
6388.
• Overbooking
We operate with the objective that no Guest with a confirmed reservation
should be denied
boarding. Keeping this objective in mind we commit to as many Guests
reservations as the
number of seats on each flight.
• Refunds
On cancellation of a booking, the refund will be processed in the same
medium in which the
ticket was purchased, and through the point of sale.
• Terminal locations
Currently Kingfisher Airlines operates to Agartala, Agatti Island, Ahmedabad,
Bagdogra,
Bangalore, Bhubaneshwar, Bhuj, Chennai, Coimbatore, Delhi, Goa, Guwahati,
Hubli,
Hyderabad, Imphal, Indore, Jaipur, Kochi, Kolkata, Mangalore, Mumbai,
Nagpur, Pune, Raipur,
Srinagar, Trichy, Tirupati, Trivandrum, Varanasi, Vijayawada and
Vishakapatnam airports.
• Valet assistance
As a value added service, Valet assistance is available at all airports. This
assistance is available
from the time you reach the airport to the time you Check-in. Assistance is
also available on
arrival at the airports.
• Checking-In
All efforts are taken to ensure a smooth Check-in. The availability of multiple
Check-in counters
and the presence of efficient staff help reduce congestion, which translates
into less waiting time
at the counters and 'On time' departure of our flights.
• Delay Handling
In case of delay at the airport, we make all effort to minimize the
inconvenience. Guests are
offered refreshments in case the delay is more than one hour. In case of
longer delays, Guests are
offered meal subject to the airport facilities and local infrastructure.
• Roving Agents
No more waiting at the Check-in counter. Now guests with hand baggage
need not wait at the
check-in counter to collect their boarding pass. They can directly approach
the security check-in
counters. Deployed outside the Security check-in area will be Kingfisher
Airlines' Roving Agent
who will attend to these guests personally and book them on their choice of
seats. Specially
trained Roving Agents will reach out to guests and check them in using a
mobile digital device
and printer. Kingfisher Airlines is the first airline in India to launch this unique
service.
• In-flight entertainment
At Kingfisher Airlines, we take pride in being the first domestic airline in India
to offer
personalized In-flight Entertainment. Guests have the option of Live TV, Fun
TV and 10 audio
channels on Kingfisher Radio with choices appealing to every segment's
expectations. The video
choices range from Sports to fashion to an exclusive channel for kids.
Similarly the audio
channels range from Ghazals to hip- hop to rock music. All efforts are made
to ensure that you
have a wide selection every time you fly with us. Another unique feature of
our In-flight
Entertainment system is the on screen moving map that let you know the
Funliner's location,
altitude, speed and other relevant flight details.
• Meal options
We offer our Guests complimentary meals on all our flights. At this stage,
Guests have the
choice of opting for vegetarian or non vegetarian meals on most sectors. The
menus are designed
considering the Guest feedback and are frequently changed to meet their
changing tastes. To
ensure that the Guests get different choices every time they travel with us,
we have six different
types of menu which are changed everyday.
• World class crew
Our Crew is personally selected by the chairman. They undergo a rigorous
training program in
the Safety and First aid, Service Delivery and Personality development
before they are cleared to
take on the role of hosts on board.
• Baggage Delivery
We at Kingfisher Airlines endeavor to reunite your checked baggage with you
as soon as you
reach your destination. Kingfisher Airlines representatives are present in the
arrival lounge
should you need any assistance on account of bulky baggage.
• Delayed / missed Baggage
In a situation of misrouted baggage we will make every effort to locate and
deliver your baggage
to you as soon as possible. When a misrouted baggage is tracked we
attempt to deliver it at our
expense at the time convenient to the Guests. Delivery of baggage for
international destination in
case of transit, may take some time considering the longer flight duration,
availability of flights
and custom and immigration procedures. Details about our policy on lost
baggage can be viewed
in the Conditions of Carriage section.
• Your special needs
We at Kingfisher Airlines are committed to provide a seamless travel
experience to our guests
who require special assistance. This commitment is clearly established by
the fact that our
personnel at various functional areas are well trained to handle your special
needs. Special care is
taken even while assigning a seat on board the flight. These Guests are
assigned seats closer to
the exits and lavatories so that they can board, use facilities and disembark
in comfort. To enable
us to serve you better we request you to inform us about your special needs
within a reasonable
time before your travel.
• Unaccompanied Minor
Flying alone can be a thrilling experience for kids, especially with a little
advance preparation.
Children may be nervous at first, but chances are they'll soon be absorbed in
the adventure of
stretching their own little wings.
Children in the age group of 5 to 11, holding a confirmed reservation and
traveling alone qualify
as Unaccompanied Minors. We take the responsibility of escorting them
safely to their
destination. Kingfisher Airlines personnel assist in check-in and boarding
process and introduce
the child to the flight attendants on board. Our flight attendants take special
care of the child to
ensure a comfortable and enjoyable flight. At the destination our staff
escorts the child to the
arrival terminal and meets the person named on the UNM form. Only after
checking the
credential of the assigned person is the child released. The airline will assign
someone to take
care and make sure that your child is never really alone
• Guests with reduced mobility and Senior Citizens
Guest with disabilities can expect a personalized and caring treatment from
us. An escort with a
wheel chair can be assigned to the Guest. Help in check-in, boarding and
disembarkation can
also be availed. Our flight attendants are formally updated about Guest's
requirements on board
their flights. Besides, a personalized briefing is also conducted on the flight
for Visually
impaired Guests, Guests with reduced mobility and other Guests with special
needs to familiarize
them with the safety and service aspects of the flights. Similarly senior
citizens also have the
option of availing wheel chair assistance if required.

ENABLING SUCCESS
Managing People
People as a resource
Kingfisher will succeed or fail as a team.
Each one of them must respect their colleagues regardless of their
rank, and they work
together to ensure their mutual success.
Kingfisher takes their employee as resources.
They train them in such a way that the do a value addition in the
organization.
Kingfisher employee work in team and they have collective behavior
among themselves.
Performance Management
The Company provides its employees with suitable training and
development
opportunities to help them grow and develop their skills which are
unmatched in
the industry.
This aspect of their training has helped their employees in creating a
sound impression on
their customers and they have become a highly admired airline
company in India.
The employees are paid good salaries and performance based
incentives to motivate them
even more.
HR function
Recruiting quality people is a major plus point of the kingfisher.
They hire the best people in the industry and pay them handsomely so that
they contribute to the
company’s goals and ambitions to the best of their capabilities.
Managing People
The crew members of Kingfisher are paid more than their counterparts in any
other airline
company in India.
Kingfisher has HR Management Information System which keeps record on
performance of the
human resource.
Training/ Learning Management System (LMS)
Performance Record
Structure and Processes
IATA
IT
ICAO
KFR
Callsign
KINGFISHER
Founded 2002
Hubs Bengaluru International Airport
( Primary Hub)
Chhatrapati Shivaji International Airport
( Secondary Hub)
Indira Gandhi International Airport
( Secondary Hub)
Focus cities Ahmedabad
Chennai
Hyderabad
Kolkata
Frequent flyer program King Club
Fleet size 75 (+139 Orders, 25 Options)
Destinations 77 (Including routes servedKingfisher
Red)
Parent company UB Group
Company slogan Fly The Good Times
Headquarters Bangalore, India
Key people Dr. Vijay Mallya, CMD
Mr. Hitesh Patel, EVP
Mr. Rajesh Verma, EVP
Mr. A. Raghunathan, CFO
Kingfisher Airlines currently operates with a brand new fleet of 8 Airbus A320
aircraft, 3 Airbus
A319-100 aircraft and 4 ATR-72 aircraft. It was the first airline in India to
operate with all new
aircrafts. Kingfisher Airlines is also the first Indian airline to order the
Airbus A380. It placed orders for 5 A380s, 5 A350-800 aircrafts and 5 Airbus
A330-200
aircrafts in a deal valued at over $3 billion on June 15, 2005.
With the sign of trouble in aviation industry, Kingfisher airlines and Jet
airways (used to be
competitors), formed alliance (October, 2008) to significantly rationalize and
reduce costs and
provide improved standards and a wider choice of air travels options to
consumers with
immediate effect
• Kingfisher airline has won global awards at the SKYTRAX World Airline
Awards
ceremony held recently in Hamburg , Germany(2009).
• Air France –KLM is in talks with Jet Airways and Kingfisher Airline for having
a codeshare
agreement .The conclusion of this agreement could help passengers ,
especially
from smaller cities ,to travel further on the network of these global airline.
• Kingfisher Airlines has launched “Five Star Privileges” ,an exclusive
program that
entitles guests to avail of great deals at partner establishment around the
country.
• Kingfisher Airlines captures market share with strong passengers in
February 2009 as per
the latest ministry of Civil Aviation data.
• Kingfisher Airlines has deferred deliveries of some Airbuses (EAD,PA)
aircraft, wary of
overcapacity as airlines struggles to cut costs to offset high fuel prices and
softer demand.
The Airline , a unit of alcoholic drinks maker UB Group , has negotiated with
Airbus to
defer deliveries of 32 A320-family aircraft to 2010-2012 from2008/09,
Kingfisher,
which owns discount carrier Deccan Aviation DECA.BO, has five A380 super
jumbos on
order , scheduled for delivery from 2012 , as well as 20 A350 Aircraft
scheduled for
delivery from 2013.
It also has a further 20 A330/200 aircraft on order , making it one of the
single largest
stakeholders in the Airbus order backlog by
number of planes.
• Indigo ,paramount Mull joining Jet Airways (India) limited and Kingfisher
Airlines Ltd
ties up
• Kingfisher Airlines Ltd plans to sell 25% stake to allow foreign airlines to
invest in
domestic carriers, with a cap of just below 26%.
• Kingfisher Airlines Ltd in talks to lease out two of its Airbus A330 planes to
Nigeria’s
Ank Air.
• Recently, it has announced management change .
• Air India has rejected the Jet Airways(India) Limited-Kingfisher Airlines Ltd
offer to join
their Alliance.
• Deccan aviation Ltd has changed its name to Kingfisher Airlines Ltd.
• Private air carrier Kingfisher Airlines has inked an agreement with Citibank
Cards which
allows members of its 'King Club' holding the bank's cards redeem their
points for flights
on Kingfisher Airlines or its partner airlines.
King Club is the airline's frequent-flyer programme.
"The association will benefit members of King Club, the frequent-flyer
programme of
Kingfisher Airlines and Citibank cardholders who are King Club members
Managing Information
New Business Model
To further its expansion plan KFA put in its bid to buy Sahara in November
2005.How ever
negotiation came to a standstill when KFA felt the valuation of Sahara
Airlines of around
US$750mn to US$1 bn. was too high.
KFA has plans to make an Initial Public Offer (IPO) and raise around US$200
mn that would be
used for its fleet acquisition and route expansion activities.
KFA set up Kingfisher International Inc. (KII), a subsidiary in US for its
international
operations. KFA plans to operate international routs by end of 2007. But KFA
had yet to
receive permission from the Indian government.
According to Indian government domestic air carriers are not allowed to fly
international routes
without five year of domestic flying experience. But Mr. Mallya said if he
failed to
convince the government to change its rules, it would start an airline in a
foreign country
and fly it to India.
May go for other services like international flights (concentric diversification).
May go for arrangement fashion shows (horizontal diversification).
Mergers and Acquisitions
Dec. 2007Low-cost carrier Deccan and Vijay Mallya-led Kingfisher Airlines
decided to merge
and create a single corporate entity to cut down operational costs and
accelerate their
journey to profitability. Shares of Deccan Aviation have doubled in a little
over a month
in anticipation of a reverse merger of Kingfisher Airlines into Deccan
Aviation. Details
of Deccan-Kingfisher merger, valuations and swap ratio will be worked out by
accountancy firm KPMG.
Mallya would be the chairman and CEO of the merged entity, while executive
chairman of
Deccan, Captain G R Gopinath would be the vice-chairman.
Managing Finance
Mallya made it clear that KFA would not be positioned as a low cost carrier as
passengers would
attribute the features of low cost carriers like low quality of service, delayed
flight
timings, etc., to KFA as well.
Hence, the airline was called a budget airline and not an LCC. Fares were
above those of LCCs
but lower than the economy class fares of Jet, Sahara, and IA. KFA also
allowed multiple
fare options and auctioning of tickets on all traffic routes.
Kingfisher follows a dynamic fare policy and the fare levels fluctuate
depending on the number
of bookings made / anticipated on a particular flight.
It is their commitment to Guests that at any given point of time the lowest
available fare
at that time would be made available on all booking mediums.
The Company offers world class services at the most competitive prices.
Their services are rated
as the best in the Indian aviation industry and their pricing strategy aims at
acquiring
customers from their competitors by providing state of the art services at
very
competitive prices.
The company carefully analyzes its load factors in order to optimize their
investments in the
operations and to break even because they are operating in a very dynamic
industry and it
is very crucial for them to have a measure their costs so that they can
optimize the
profitability of their operations.
KFA came up with many new financial strategic moves that made it one of
the leaders of
aviation industry the company had adopted following strategies:
The company is planning to spend close to Rs 40 crore on various
media and below-the-line
marketing activities for the year 2009-10
Cut down the salaries of the staff like trainee pilot now drawing Rs20k as
compare to Rs2.0lacs.
To come over the financial crisis the KFL is considering an option of
retrenchment.
It purchased brand new A320 aircrafts powered by the cockpit that was a
paperless
environment.
KFA was first Indian carrier to place an order for A380s. The ROI (return on
interest) for
Kingfisher Airlines turns out to be low since the capital investments done by
them are
very high and profits incurred are low.
ROI = Profit / Capital Employed
The strategy proposed for Kingfisher Airlines in this assignment would help
Kingfisher Airlines
to recover from their losses by a substantial amount but the strategy of Vijay
Mallya is to
conquer the Indian Aviation market by any cost.
Managing technology
The cargo sector in the domestic industry is very much unexploited
and the company can
exploit this because they have access to some of the most profitable
routes in the
industrial towns and cities in India. The company has got a sound
infrastructure to
support its cargo operations and they should take advantage of this
before their
competitors.
• The company has hangers at the major airports in order to increase their
revenues while
cutting down the costs. For Example, if they have their own hangers then
they will not
pay the parking charges to the competitors and at the same time if they
have their own
hangers then they can charge their competitors for using their hangers
which will increase
their revenues.
Seek additional distribution channels such as more tie ups & collaboration,
try seeking
collaboration with international carriers, bilateral discussions over seats and
code-sharing
between the carriers.
Easy accessibility to Guests.
Telephone numbers are accessible 24 hours
Easy availability of tickets.
Amendments and Cancellations up to one hour before the scheduled
departure.
Keep their guests informed in case of known delays, cancellations and
diversions.
Valet Service
Checking-In, multiple checking counters.
Guests are offered refreshments in case the delay is more than one hour
Inflight entertainment
Meal options
World class crew
Managing Strategic Change
Diagnosing the change situation
The fluctuating aviation turbine fuel (ATF) prices are always a concern for low
cost airlines,
according to analysts. Many doubt how long these no-frills airlines can
survive in the
market. In Europe, low cost airline boom was followed by a bust, which only a
few
competitors survived. Since low cost airliners depend on maximum utilization
due to lack
of stand-by aircraft, any technical snag would adversely affect on the
travellers as only a
refund is made and no alternative travel arrangements are done
Experts say that airlines compete primarily on three fortes such as price,
customer service and
value-added services. While no-fillers fight the price war, service is the main
thing
provided by their larger peers.
The critical factor will be the ability to keep costs low and the offer of an on
time service at an
affordable price, despite the infrastructure constraints, for survival.
The next issue to tackle is to properly position itself in the aviation market.
The Indian customers are not that much mature as compared to their
American contemporaries.
They will not pay more for just mere entertainment or watching TV in a flight
of one or a
half hour journey.
Poor airport infrastructure such as few landing slots, Inefficient Air traffic
controllers, not yet
automated systems prone to human delays and errors, shortage of skilled
personnel.
The revenue per seat is low.
It cannot rely solely upon the direct selling model for sell of the tickets as the
Internet and credit
card penetration is not that remarkable.
The dishonesty of travel agent who usually do not push their seats as that of
the rival’s.
A certain amount of churn and turmoil for players who don’t have the deep
pockets. For
example, as happened in USA, many smaller airlines without deep pockets
fell by the
wayside unable to sustain the predatory pricing techniques adopted by their
strong
opponents.
The outdated Aviation rules in India which compels the airlines to add more
to their operating
cost, which could have been easily, do away with.
Taxes like passenger service fee which is Rs. 221 on one seat looks
ridiculous for a ticket worth
Rs. 99.
Overhauling costs is another major hurdle.
Current number of pilots in India is over 1,500.
According to aviation ministry sources, the money that is coming to the
sector is from dubious
origin in several cases & is from investor seeking quick returns. So it may be
possible
that some of the players may not even be in the game for long. They may
sellout after
listing on the stock market or get bought out, once the market starts
consolidating.
Types of change
It planned to re-launch its commercial air service called UB Airway again
which it had to
withdraw it due to government restrictions.
The company gave best services to its customers that were like providing
world class interiors,
and in-flight entertainment systems.
The company came up with only one class airlines rather than other airlines
that had Business
Class; Economy Class the idea was to combine Business Class experiences
and Economy
Class experiences in one.
Having a single class freed up more leg space for passengers when
compared to normal economy
class flights.
The company started addressing its customers as “GUEST” rather than
passengers.
The company made its mark by providing its guests with more legroom and
bigger seats so as to
provide better comfort.
KFA has set its sight to become India’s largest airline both is capacity and in
market share.