KINGFISHER AIRLINES

Presented by:

Team Dandi. Kavya. Neha.D.Sthawarmath.

AGENDA
A Brief introduction of Kingfisher Airlines Reasons for failure New marketing strategies New pricing strategies Media Plan Conclusion References

A BRIEF INTRODUCTION
Kingfisher Airlines started its operation in 2005, with center of operations as Bangalore. The primary focus was customer comfort and service which was well appreciated by the passengers. First Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights.

 Won the Freddie Awards 2008 for best consumer service Second largest share in India's domestic air travel market till December 2011. India's only 5 Star airline, rated by Skytrax and 6th airline in the world. Kingfisher Airlines has codeshare agreements with American Airlines, Asiana Airlines, Philippine Airlines.

REASONS FOR FAILURE

Problem associated with the Aviation sector Faulty business modal of Kingfisher Airlines Improper handling of Financials by the company's management Acquisition of Air Deccan by Kingfisher Vijay Mallya's over enthusiasm killed Kingfisher Airlines High airport charges Slump in air travel due to global recession

No signs of FDI Analysts negative on the stock Low-fare No Network Planning Sky rocketing of Aircraft Fuel Price Moving center from Bangalore to Mumbai where it was the sole carrier offering international ops. Frequent change of focus from full service carrier to low cost model and again back. Less focus on Low-cost aviation business which has 70% market share in aviation industry.

Many unprofitable routes leading to : Multiple hopping resulting in delay of flight More turn around time as compared to competitors Moving to expensive new terminals in Delhi n Mumbai. Diversified aircrafts leading to : High Inventory of Spares High Training Cost High Maintenance Cost High Operational Cost Scheduling difficult

STRATEGIES

 Find a strategic partner with significant hunk of cash might be forced to undergo a wind up that entails to liquidation of corporate assets to payoff its liabilities. Kingfisher Airlines, is in talks with two foreign carriers, including International Airlines Group (IAG)- the owner of British Airways and Iberia, for a potential rescue package. There is huge possibility that the government would bail out the airlines as kingfisher airlines constitute around 16% of the total Indian fleet and holds 18% domestic passenger shares.

FUTURE STRATEGIES

 Market Penetration: Can tie up with Corporate and Government Companies by Providing Unique Travel Solutions for Professional and Personal Use.
Product Development: Seek additional distribution channels such as more tie ups and Collaboration. Collaboration with international carriers, bilateral discussions over seats and code sharing between the carriers.

 Market Development: Special offerings for first time fliers. Try to find out new customer group such as old-retired persons. Diversification: Can enter into other Transport Services like Bus Services between Major Cities and Other Services.

PRICING STRATEGY
Select Pricing Method: The company had announced in its annual general meeting in Bangalore that it will be discontinuing the low-cost service. Kingfisher, which holds a 18.8 per share of the domestic market, also announced it would reduce the number of business class seats on many of the aircraft on its full-service fleet and add seats to the economy section. The airline claims the two moves will increase its capacity by around 10 per cent. More recently, it announced it would try to raise around $250 million in global depository receipts. But its performance continues to be mixed. Though its first quarter results for the current financial year showed net sales increasing by 14.7 per cent to Rs 1,881.64 crore, its losses continued to mount. The loss for the first quarter was Rs 263.54 crore against Rs 187.35 crore in the same period last year. Kingfisher has attributed the decline to the rise in the price of aviation turbine fuel.

Selecting the Final Price: The two far-reaching decisions are part of the airline's continuing efforts to reduce its staggering total debt burden of around Rs 5,500 crore. In April this year, it allotted around 11 per cent stake to State Bank of India and ICICI Bank in a debt restructuring exercise. NEW PRICE STRATEGY: Route rationalisation : cutting bank unprofitable sectors and services to several cities. Debt recast: asking banks to reduce rates or take a cut on loans or find a local investor Raising capital: it has plans to raise $200 million thru GDR FDI: If the FDI limit is raised and foreign airlines are allowed to buy a stake, mallya could recapitalise kingfisher.

MEDIA PLANS
Target customers: Tourists and Travellers Businessmen NRIs General public

Budget: Rs 8 crore Per year

Media Used: Television Radio Magazine Newspaper Social networking sites Hoardings Campaigns

CONCLUSION
Main reason for Operational Strategy failure were Multiple hopping of aircrafts and more diversified aircrafts. The impact of high fuel cost, high interest rate, depreciation of Indian Rupee and extraordinary expenses on account of return of aircraft to the lessors and the costs associated with non-operating aircraft, resulted in a loss after tax of Rs. 651 crore. Kingfisher airlines continues to believe that it will get recapitalized and get on a path of profitability. The airline is in discussion with several strategic and financial investors to bring fresh capital. KFA is now taking steps to improvise their operational strategy.

REFERENCES
http://businesstoday.intoday.in/story/vijaymallya-shuts-down-kingfisher-red/1/19258.html http://www.firstpost.com/business/the-curiouscase-of-vijay-mallya-how-kingfisher-flew-high-ontaxpayer-money-218647.html www.economictimes.com www.forbes.com

We Are Ready To Rule The Sky Again Are You???? -Fly The Good Times