INDUSTRY ANALYSIS OF KINGFISHER

AIRLINES

SUBMITTED BY

GP. NITIN

GURMAN SABHARWAAL

MEGHA THOMAS

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INTRODUCTION
Time to book a ticket and the only airline that runs through your mind at that
point is Kingfisher. When you scan through your web page while booking your
ticket or when your travel your travel agent is on the line one always hopes that
the fare of kingfisher is reasonable so one can experience the tagline , “Live life
kings style “. The tag line itself has created a huge promotion itself. The way
one is treated when travelling on kingfisher is a memorable experience. The
colour red itself is attractive and make one feel royal. Vijay Mallaya who is a
living example of the whole way kingfisher functions. Passengers feel proud
when they say they are travelling by kingfisher. Although in the past it has been
divided into Kingfisher Red and Kingfisher Class .the 8 P’s of servicing are
understood by this airline and are well applied to the whole Kingfisher concept.

The inauguration of this airline itself created the buzz with

models as airhostesses, with leather seats and mouth melting food being served
on the airline. One couldn’t resist themselves to travel on this airline. The
Kingfisher calendar And the various events being sponsored by the airline did
its major promotion for it being a hit in the Indian airline sector.

Kingfisher Airlines is a private airline based in Bangalore, India. Currently, it

holds the status of India's largest domestic airline, providing world-class
facilities to its customers. Owned by Vijay Mallya of United Beverages Group,
Kingfisher Airlines started its operations on May 9, 2005, with a fleet of 4 brand
new Airbus - A320, a flight from Mumbai to Delhi to start with. The airline
currently operates on domestic as well as international routes, covering a
number of major cities, both in and outside India. In a short span of time,
Kingfisher Airlines has carved a niche for itself in the civil aviation industry.

HISTORY
Kingfisher Airlines proved to be a stiff competition for other domestic airlines
of India, with its brand new aircraft, stylish red interiors, stylishly dressed cabin
crew and ground staff. The airline introduced in-flight entertainment (IFE)
systems, for the first time to Indian consumers. The IFE systems were provided
on every seat, even on the domestic flights. The airline offers attractive services
to its on board passengers. Years following its inception proved to be beneficial
for the airline, in terms of its booming business, with a good track record of
customer satisfaction. However, it faced a worsening economic scenario in
2008.

UNIQUE SERVICES
Kingfisher Airlines 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.

FLIGHTS
Kingfisher Airlines was the first airline in India to operate with all new aircrafts.
It was also the first airline in the country to order the Airbus A380. Kingfisher
Airlines currently operates ATR 42, ATR 72 and Airbus A320 aircraft for
domestic and Airbus A330s for international services. In the present time, the
airline operates with a fleet of 74 aircrafts, which include 25 Airbus A320-200
aircraft, 6 ATR 42-500, 27 ATR 72-500, 3 Airbus A319-100, 8 Airbus A321-
200 and 5 Airbus A330-200. Delivery of A380s is due in 2010 and A350s in
2012.

8Ps OF THE COMPANY

PRODUCT

The airline is known for being one of the top international carriers and is
one of only six air carriers to receive a 5-star rating from Skytrax.
Currently the kingfisher airline operates the aircrafts like the airbus A-
320, A319-100 and ATC 72.After acquiring the Deccan, kingfisher has
started a new fleet known as kingfisher red. Kingfisher also caters to the
domestic and international service markets. The airlines also cover 74
domestic destinations and 3 international destinations in three countries
across Asia and Europe. On 3rd September 2008 kingfisher started its
international flight from Bangalore to London. They mainly position
themselves to cater to the premium segments in the market competing
against the Jet airways.

PLACE

Kingfisher airlines covers even the toughest terrains in the country, and
the services ranges from Ahmadabad to Agartala and to the major cities
such as Delhi, Bangalore, Chennai etc. The main strategy kingfisher
follows is to target the metro cities or the tier one cities in India. They
have also started their services in tier two cities such as Mysore to expand
their customer base.
PROMOTION

There are many events and advertisements through which kingfisher

airlines is promoted. They sponsor a number of events ranging from
sports events such as the IPL to Formula one racing. A number of
celebrities are also used in promoting the airlines. There are multiple
touch points and finer promotional services working for the promotional
activities. Loyalty and frequent flyer programs such as the king club are
carried out to make the customers more special. Kingfisher Airlines has
members in the Red, Silver and Gold membership levels. Various events
and advertisements are done for promotions.

PRICE

The price segments that kingfisher targets is the higher income group as
well as the upper middle class background .There are few segments that
are majorly for the youth and the higher lifestyle segments. Sec A, sec B+
socio economic class mainly the age group of 25-45 years are the main
segments for which there is a specific price offered by kingfisher airlines.
Some of the prices offered by the kingfisher do emphasis on their policies
to target those segments which are willing to pay for luxury.

PEOPLE

Kingfisher airlines cater to the hospitality industry. People with high

interpersonal skills are employed which in turn helps them to interact with
customers on a wider basis and live up to the standards. People with aptitude
and services knowledge are employed. They also have the reputation of
having beautiful air hostesses to add to the popularity of the airlines.
PROCESS

The process of booking tickets involves online booking, tele booking and
booking at various kingfisher outlets. The website offers various types of
bookings that can be made such as group booking, business packages, corporate
booking etc. The latest technologies such as net banking are also used in the
process of giving wide options of payments for the customers.

PHYSICAL EVIDENCE

Kingfisher is known for its style , quality and comfort. The physical evidence
is the comfortable seats, the lounge if you are a kingfisher member. The buses
which are again red and comfortable, the check in counter the dresses of the
staff right from the ground staff to the airhostesses. Everything has been done
with taste. The seats are comfortable and every passenger is provided with a
screen and ear phone to listen to songs or the radio to keep them occupied.

PRODUCTIVITY AND QUALITY

Every organization works in order to improve their productivity and reduce the
costs so that they can achieve profit maximisation . One must not forget that
quality plays an important aspect too no consumer would pay if they don't get
the quality they expect the company would loose a customer. Therefore
productivity and quality go hand in hand. At kingfisher they have researches
that take place at regular intervals so that they achieve the quality and
productivity that the airline is known for.

PEST ANALYSIS OF KINGFISHER ANALYSIS

This includes the analysis of the political, economic, social and technological
factors.

The political factors are

1. The airline believes in open sky policy which calls for the liberalization
of rules and regulations on international aviation industry most specially
commercial aviation - opening a free market for the airline industry.
2. The foreign direct investment limits ie 100% for green field airports and
49% for airport is another important factor.
The economic factors are

1. Rising cost of fuel.

2. Very high investments in the aviation industry.
3. Very high disposable income

The social factors are

1. Development of the cities which has better access to the airports.

2. Good safety regulations.
3. Better employment opportunities.
4. The status symbol attached to air travel.

The technological factors are

1. Growth of e-ticketing and e-commerce which is more convenient for the

customers.
2. Usage of satellite navigation system.
3. Modernization and privatisation of the airports.

SWOT ANALYSIS OF THE COMPANY

STRENGTH OF THE COMPANY

1. Strong brand value and reputation of the company.

2. Quality of the service.
3. Route rationalization.
4. It’s the first airline having new fleet of airbuses.
5. Quality and continuous innovation.

WEAKNESS OF THE COMPANY

1. Very tough competition.

2. High ticket pricing.
3. Its still a non profit organization.
OPPORTUNITIES FOR THE COMPANY

1. The expanding tourism is one such area that can be tapped.

2. The international market.
3. Untapped air cargo market.

THREATS FOR THE COMPANY

1. The rising amount of competitors.

2. Very high fuel prices.
3. Saturation of the tourism industry.

SEGMENTATION, TARGETING AND

POSITIONING OF THE COMPANY
The airline like any airline company has used segmentation based on dividing
the passengers into business and economic travellers. The common strategy is to
squeeze in as much as profit from the business class as they get attracted to the
superior services and then trying to fill the remainin seats with economic
passengers.

The business class constitute 48 % of the passengers and contribute 66% to the
revenue. The whole segmentation is based on the income group of the people.
the target group of this airline are the elite crowd coz of its brand name.

KINGFISHER VS JET AIRWAYS

Jet's Strengths

* A phenomenal and well-developed network both of the airline and the

chairman.
*Naresh goyal’s knowledge of the sector.
* A massive pool of loyal customers.
* Excellent lobbying skills and ability to leverage connections within
government.
* Ability to survive downturns earlier.
* Financing raised on strength of own balance sheet.
* Has built a professional organisation.
Jet's Weaknesses

* A perceived drop in service standards when pitted against Kingfisher.

* Struggling with the carcass of Air Sahara.
* Poor people management skills of chairman.
* Inability to raise money for the last two years.

Kingfisher's Strengths

* Superior product on ground; in the air Jet business class is being equated with
Kingfisher's economy.
* UB group backing for raising financing.
* Well capitalised airline, prepared to take losses.
* Better handling of employees and staff; less centralised style of functioning.
* Chairman Mallya's grand vision where it is looking to be among the best in
the world.
* The Deccan deal - which gives it market share, a new market segment and
was cheap.

Kingfisher's Weaknesses

* Kingfisher is yet to build itself into an organisation; structures yet to fall in

place.
* Not as professionally run as Jet; yet to build a professionally competent team.
* Mallya's knowledge of the sector does not parallel Goyal's.
* Chairman's people skills are better but employees have to work very erratic
hours.
* Unable to leverage connections to the same extent while lobbying.
* Kingfisher's loads are lower than Jet's, which could be a reflection of its
marketing and sales ability.
Posted by Paresh Mashete at 9:54 AM 

STRATEGIES USED BY THE AIRLINE

  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

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.

HUMAN RESOURCES 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”.