Competitive advantage: Provides 5 star services at cheapest prices when compared to the competitors Takeover of Air Deccan, Kingfisher

planned its strategy for overseas operations, anticipating Deccan s eligibility to fly on international routes y Revolutionized international air travel by extending some of the services offered to first class and business class to economy class passengers with all new aircraft. y With the introduction of Kingfisher Red, Kingfisher has 3 product offerings: premium business, premium economy and premium low cost. Kingfisher's offerings span the entire market. This very positioning and market coverage becomes a source of competitive advantage as it gives Kingfisher the flexibility to consolidate its position Further Initiatives to generate higher revenues & improve consumer connect y New frequent flyer program launched with unique features like non-air rewards, family club etc. y y y y New Internet booking engine driving greater consumer traffic towards online bookings Incremental passenger connections generated through launch of One Stop Connect campaign

Stringent actions planned and undertaken to keep costs under control y Reduced lease costs by >25% (over Q3 FY09) through redelivery of non operational aircrafts y y y y Reduced personnel costs by >20% (over Q3 FY09) through replacing high cost expats Planned to reduce Engineering costs by 10-15% by induction of new key vendor Successfully implemented Fuel Monitoring System for targeted reduction in fuel consumption Exercised stringent controls across over heads to reduce costs e.g. Optimized office & warehouse spaces across all locations, planned reduction of communication costs etc.

Planned expansion of International footprint y Plan to further utilize narrow body fleet on lucrative short haul markets

IFE MATRIX

20 .05 3 0.20 0.10 3 0.10 4 0.10 4 0.05 3 0.30 0. Kingfisher Airlines Ltd and Dish TV have joined hands to provide live in -flight 0. network of 77 destinations.10 0.10 0. with regional and long -haul international services.15 0.40 entertainment on Kingfisher aircraft Finnair to sell more Indian destinations through Kingfisher 0.Operates more than 400 flights a day.05 2 0.10 Alliance with Jet Airways The opening up of new international routes by Indian government 0.30 0. Wide operating network .15 0.Strategy formulation: Key Internal Factors STRENGTHS Weight Rating Weighted Score Lower air fares of Kingfisher Red 0.40 Kingfisher is one of only 6 airlines in the world to have a 5 star rating Strong Brand value & Reputation in the minds of customers.10 WEAKNESS High operational cost for airlines.05 3 2 0. Kingfisher has high debt in comparison to its rivals 0.10 2 2 0.

15 SWOT MATRIX: SO STRATEGIES: Introduction of kingfisher RED took advantage of Rising share of low cost carriers . Kingfisher went into alliance with other airlines to meet Acute shortage of Pilots and maintenance engineers WO STRATEGIES: y Even though kingfisher is not a profit making org anization.00 2.15 0.05 0. Training infrastructure incompatible both in terms of quality and quantity Total 1.80 0.10 3 2 0.Still not a profit -making organization Acute shortage of trained pilots and 0.05 3 0.20 technicians. at 20 per cent. India's civil aviation ministry expects 100 million passengers by 2020.This is because of Increasing Consumerism and Affordability to common man due to increase in disposable income Alliance with other airways to meet the India's civil aviation passenger growth. which is also a good opportunity for kingfisher. y WT STRATEGIES: . the high outbound travel population in India is a great opportunity to grow its customer base and increase revenue. ST STRATEGIES: Kingfisher airlines introduced kingfisher red to counteract high operating costs. is among the highest in the world Wide operating network to meet Growing outbound travel in India Kingfishers in-flight entertainment will satisfy the needs of business class and tourism department.

y High operational cost for airlines is a huge drawback for kingfisher. 355Crvs. 182 Cr in Q3 FY 09) ‡EBITDA loss of Rs.74 Mn vs. the passenger count can be increased. loss of Rs 442 Crfor YTD FY 09 (Domestic EBITDAR of Rs.11 Cr vs. 4132 Cr in YTD FY 09) ‡EBITDAR profit of Rs 485 Crvs. 77Crvs. Rs 65 Crprofit for Q3 FY 09 (Domestic EBITDAR of Rs. y A shortage of qualified instructors is faced by Kingfisher. Rs. the acute shortage of Pilots and maintenance engineers restrict operation at the optimal level. Rs. loss of Rs. 1420 Cr in Q3 FY 09) ‡EBITDAR profit of Rs 185 Crvs. Also. If optimal level of operations are achieved. 3412 Cr vs. 216 Cr vs.246 Crin Q3 FY 09) -improvement of Rs 925 Cr ‡EBITDA loss of Rs. 679 Cr vs. 1194 Cr vs. loss of Rs 122 Crin Q3 FY 09) ‡Revenue passengers carried 2. loss of Rs. If qualified instructors are recruited and security measures are hiked by the airline. Also. loss of Rs. thus making it more profitable FINANCIAL ANALYSIS: Financial Highlights: Q3 FY 10 Total Operating Revenues of Rs 1353 Cr (-7% over Q3 FY 09) (Domestic Revenues of Rs. they can reduce operational costs and increase the profit margins. Rs. 2. 297 Crin Q3 FY09 (Domestic EBITDA profit of Rs. 1342 Crin YTD FY09 .63 Mn (up 4% over Q3 FY09) Financial Highlights: YTD FY 2010 ‡Total Operating Revenues of Rs 3776 Cr (-9% over YTD FY 09) (Domestic Revenues of Rs. High security threats in the subcontinent makes passengers look for safer options.

y In ± flight reading material: Their on board reading material is a mix of international and domestic business. y In ± flight reading material: Selection of Indian publications such as cine blitz. snacks and dinner depending on flight timings. y Kingfisher lounge in the air: Kingfisher first lounge on board is staffed by professional trained bartenders offering signature cocktails in a luxurious setting.11 Mn (up 1. Economic Times and local newspapers as on board reading material y Efficient service at low cost: A judicious mix of customer service and basic comforts provided at low cost. moisturisers. lip balm and sleeper suits) exclusively designed by Salvatore Ferragamo.4% over YTD FY09) BUSINESS MODEL Differentiated Strategy: Kingfisher class y Gourmet cuisine: Only domestic airline to provide gourmet menus created by a team of renowned chefs. Kingfisher red y Complimentary hot & filling on ± flight meals: Only low cost airline to provide complimentary meals including breakfast.(Domestic EBITDA profit of Rs. fashion and leisure magazines.22 Mn vs. loss of Rs 1058 Crin Q3 FY 09) improvement of Rs 1073 Cr ‡Revenue passengers carried 8. Times of India.The Value-Creation Frontier .15 Cr vs. y In ± flight guest amenities: Kingfisher first amenities (perfumes. 8. lunch. The newspaper selection ranges from The International Herald Tribune and The UK Times to ethnic language publications. Competitive Positioning . Delivers a delightful experience to the cost conscious yet discerning travellers. Segmentation Kingfisher Airlines follow focused market segmentation where they cater to few segments of the market.

Ability to deliver a unique experience while remaining competitive .St t i s Av offe e ex economy like india ordinary growth potential in an e erging KFA Aviation business has been built on three core competencies of the group .Ability to manage scale up .

e.g. proper management of investment and earnings. H.Exercised stringent controls across over heads to reduce costs . Finance. effective use of resources. At Functional Level special attention is given to different departments which involves Technical.Planned to reduce Engineering costs by 10-15% by induction of new key vendor .. mergers & acquisition. Effective use of resources: Stringent actions planned and undertaken to keep costs under control: . planned reduction of communication costs etc. KFA joined One world alliance : .Successfully implemented Fuel Monitoring System for targeted reduction in fuel consumption . Optimize office & warehouse spaces across all locations.R.Reduced lease costs through redelivery of non-operational aircrafts . reduce the prices for high demand routes. Marketing. Resource mobilization by cutting on unprofitable routes. Corporate affairs. Research.. Legal & Secretarial.Ability to tightly manage costs At Corporate level KINGFISHER takes special care of the thrust areas of the organization such as resource mobilization.

y KFA s flight attendants called Flying models are selected through a national level model contest. Cathay Pacific. on a combined fleet of 2500 aircraft. Benefits to Kingfisher are: . y KFA also stressed the fact that its employees had to be capable enough to meet the airlines high service standards.World s most profitable global alliance. It operates 9000 daily flights.Access to market share and network without significant addition of financial investments.Access to landing/parking slots and gates that are typically leased to the larger airlines . bringing together the leading airline carriers American Airlines. . Finnair. carrying 340 mn passengers annually. Qantas. . It serves 800 airports in 150 countries.Significantly enhance customer proposition o Top-tier qualifying miles o Top-tier recognition o Global lounge access . Future capacity deployment plans include increase of frequency to the lucrative short-haul market destinations by e ploiting narrow body fleet.Provide further opportunities for cost savings and access to management best practices KFA also has a Strong and Highly e perienced management team In addition to the company s highly e perienced management team. British Airways.

Huge member base in just four years of launch b. This is because. Launch of an auto-sweep co brand credit card (current and new partner) expected by Q2 FY11 b. Partnership : a. Retail) 3. Partnerships and Frequent Flyer Programmes 1. which is expected to further enhance revenue and streamline costs 2. Frequent Flyer Programme : a. More than 88 bilateral and unilateral interline partners across the world b. Hotel. Launch of debit co-brand card expected by Q4FY11 c. Only Indian private carrier slated to join a global Alliance. For the year 2012 KFA has scheduled delivery of 6 A320 and 4 A330 (total of 10).Fleet Strategy: Airbus A 320 fleet in multiple configurations ( Single & Dual ) to aid a map to market capability ATR fleet to leverage growing underserved & underdeveloped markets Competitive A 330 aircraft designed with unique KF specs to create the best product in sky for international medium & long haul operations. New Developments and way forward: a. Increases CRM based analytics and campaigns Product: Premium class seats . Very high cabin penetration levels indicating affinity to the product (Kingfisher First penetration is appx 68%) c. they need more fleets to add to their capacity after joining the ONE WORLD alliance and also they need to expand their domestic capacity to support the expected increase due to Common Wealth Games.One World. For 2013 they are again scheduled delivery of 9 A320 and 3 A330 (12 total). Extension of King Miles as a preferred loyalty currency by increasing width of partners d. Significant ancillary revenue generation through 57 partners across 10 verticles (Banking. Focused on attaining code share c.

This clear positioning has compelled others in the business to follow suit . The results are for everyone to see. Fully-adjustable headrests. allowing travelers to print their boarding passes via www. KFA¶s Promotional Strategies & Marketing Strategies: y It came up with a very appealing promotional line ³Fly the good times´ and it reflected in the experience the company offered to its passengers. Business Strategies y Kingfisher Airlines was the first carrier to introduce first-class premium cabins onboard its flights. It started with just four flights daily and now. y Also launched the facility of web check-in. Kingfisher Airlines is not merely into the business of transporting people from point A to point B. They have created a new category of Aviation hospitality thus making service and hospitality their main focus.flykingfisher.(a) Sleeperette seats with extendable footrests. it offers 218 flights daily connecting 38 key Indian destinations and has won several prestigious awards. y KFA is also launched Kingfisher express in order to tap into the growing LCC segment. You no longer need to go to the check -in counter and wait for long. (c) Comfortable pillows and snug blankets. It was a great challenge to create this new . 48" seat pitch and a 125° recline.com and the introduction of the Roving Agent at the airport. The Roving Agent is like a check -in counter on the move. y Kingfisher Airlines in the past few years of its operations has redefined the way the Indian air traveller perceives flying. (b) Laptop and mobile phone chargers in each seat.

y Kingfisher Airlines has a clearly defined target audience. They are modern. First of these is the introduction of the Roving Agent at the airport. The fact that their average loads are over 70 percent at any given time. enjoyment. This segment has travelled e tensively and is aware of international travel trends. they have touched the consumer pulse. y The airline introduced two initiatives to enhance guest convenience.positioning.SEC A. Their guests keep coming back for more of the `Good Times onboard Kingfisher Airlines. y Looking at all international airlines we notice that no one is selling an air ticket any more. Gourmet cuisine and in flight-entertainment (there are five . they are selling an e perience that of lu ury. Rather than waiting at the check-in counter to collect their boarding pass. they are in the Aviation Hospitality Space and believe in offering their guests that ultimate e perience 30.000 feet in the skies. designer interiors. travellers can directly approach the security check-in counters. They have through their very well laid out marketing strategy successfully accomplished (such positioning). Deployed outside the security check-in area will be airline s Roving Agent. y Kingfisher Airlines offers brand new aircraft. allowing travellers to print their boarding passes. SEC B+ (socio-economic class) in the age group of 25-45 years of age. comfort. rela ation. trendy and upwardly mobile looking for a great flying e perience. They also launched the facility of web check-in. who will reach out to guests and check them in using a mobile digital device and printer. At Kingfisher Airlines they follow the same and they do not believe that they are into the business of transportation.

print. Their loyalty program/frequent flyer program better known as the King Club uses DM and customer relationship management to keep all their King Club members constantly updated on the ongoing and upcoming offers apart from the day to day developments at Kingfisher Airlines. which are personalized). With their 360-approach they find it pretty easy to connect with their consumers both in-flight and on-ground. clubs. y Kingfisher Airlines has a very well rounded marketing strategy in place. In the past. They apply a 360-degree approach towards marketing.channels of FUN TV and 10 channels of Kingfisher Radio. pubs. they have offered tickets to theatre screenings. multiple es. malls.000 members in their program and offer specialized offers to specific profiles among them depending on their interests. . They were the first and only airline in the country to offer this facility on the domestic circuit. radio. Their guests are constantly informed of their new offers. Given this they use all media of communication be it television. The idea is to create brand recall and get the message across effectively. y They offer personalized valet service at all airports to assist their guests through the check-in procedure. They communicate with guests at multiple touch points. in-flight etc. sports screenings etc. All this at no e tra cost. fashion shows. y They have over 100. outdoor. Their guests definitely saw tremendous value in flying the Good Times with Kingfisher Airlines. y A sound business model is imperative for any airline to survive.

753768 5. Pepsi. Debt burden is the greatest obstacle for Kingfisher airlines. Rs) % change No. This was due to a decline in its wage and lease e penses. Future projections: 2009-10 Revenues (in million. of departures % change ASKM(available seat kilometres) % change 11.25 700 1.25 -250 76% 9120 14. Strong resurgence in Indian market. Kenzo . of employees %change Employee cost (in millions. Rs) % change 5.352 689 7950   23 23.81 900 13.810 1.385 14. Ino . Taj.72 16218 13 4.33. to be held in October 2010.271.3 12873 9 4. Also Cricket world cup to be held around April-May 2011 in India is likely to see revival in demand for domestic air routes.5 30 4 110 144 10380 13.545426 4. Park Hotels and O ford book stores have been some of their partners.52 166350 10.42 791 11. is also likely to add to the demand for travel.75 0. Tata Tetley.41 150240 8 14353 11.553172 3. IFB.782063 5800 10 % change market share (as a percentage) % change Profits after ta (in millions. Rs) % change no.5 139112 4.5 CAGR 5. They have tied up with the best of brands across industries.24 7970 0. ¡ ¡ .y Their Partners Program has been very successful.450 11 2012-13 E 7. Microsoft.75 26 2. Air cargo traffic is likely to grow by six per cent due to a full recovery in India¶s foreign trade.428469 FACTORS TAKEN IN WHILE DETERMING THE FUTURE FINANCIAL PROJECTIONS OF KINGFISHER AIRLINES y y y y The Commonwealth Games. Operating costs controlled where possible: This is evident from Kingfisher airlines financial performance for the quarter ended 30th June 2010 where it reported a positive PBDIT after 14 quarters. and a slower growth in other e penses as compared to income.527903 -1647 -1050 36.00 2010-11 E 201112 E 6.

the decision for which would be taken closer to date. Outsourced model ensures low fi ed costs. resulting in steep increase in industry load factors £ ¢ y Cost Reduction Initiatives: Kingfisher s Multi Pronged Cost Reduction Initiatives are expected to further reduce its Costs following are the cost reduction initiatives. given the operating environment. ‡ Premium traffic has also seen a comeback and growth is expected to continue as global economy is recovering. ‡ Rationalizing Distribution Channels & routes ‡ Renegotiating Vendor Agreements ‡ Control Discretionary Spend ‡ Head Count Rationalization ‡ Operational Efficiency Favourable Economic Outlook : The economy continues to show signs of recovery with GDP growth estimates climbing back to 7% and expected to grow at 8% and above. Non-unionized workforce. Average oil price has been stable around $74 during the past 3 quarters with the e ception of April 10 ($85). Consolidation will take place in airline industry around in the FY 2011 and FY 2012 which will increase the market share of Kingfisher airlines. Initiatives to enhance cost competitiveness: y y Renegotiation of GDS contracts and channel shift to reduce distribution costs Renegotiation of E&M contracts including engine contracts y Improvement in manpower productivity through rostering & planning initiatives y Other initiatives like fuel consumption reduction Initiatives to enhance Revenue productivity : Improvements in system usage and processes for revenue management Improvements in cargo revenues through revenue management opportunities Opportunities to increase the market share: The airline has opportunities to increase its market share by using the following strategies y Enhancement of day return product across key primary and secondary sectors y Incremental passenger connections generated through launch of µOne Stop y Increased presence through expansion of inter-line agreements and evaluation of global alliances y Increased ancillary revenues through launch of cargo operations (Kingfisher Xpress) y Strengthened loyalty through enhanced FFP program y New Internet booking engine driving greater consumer traffic towards online bookings . Low employee/aircraft ratio at 115. Efficiency improvements: Kingfisher management along with Seabury has identified several initiatives to be rolled out in the current year which would help in enhancing operational efficiency .y y y y y Slot constraints in metro airports create entry barriers for new players. Domestic capacity is expected to expand lower than growth in demand. Currently KFA has an option to purchase 4 A 330s every year from 2012.

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