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

Kingfisher Airlines is the way to fly. The company is always committed and makes regular efforts to reduce its carbon footprint. the signatories are allowed to fly over the skies of India. is and will undergo various changes. Following are the various policy changes which might have an impact on aviation industry in coming years: 1. Under this arrangement. USA and European Union. 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. 2. Kingfisher Airlines offers cheaper airfares for the people who prefer online ticketing. THE ENVIRONMENT PESTEL ANALYSIS Political Factors Indian political scenario has.really feel special. 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. Open Sky Policy : India had this agreement with 40 countries and lately it signed the policy with UK. Effect: Tourist arrivals in India are expected to grow exponentially. The increase in number of international tourists will percolate down to increase in domestic passengers. especially due to the open sky policy between India and the SAARC countries and the increase in bilateral entitlements with European countries. 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. and the US. applicable air fare and much more. In India. Kingfisher Airlines has a website that allows not just online booking of flights but also allows you to check flight status. According to this policy. Modernization Of Airports: The Indian Cabinet has approved a proposal mandating the state-run airport operator to . At a number of times.

Effect: This rise in income levels along with introduction of no-frills flights will lead to: • Rise in no of travelers. ranked tenth in the world in 2004. 20 non-metro airports will be developed.15-1. Effect: It would lead to increase in imports of aircraft thus can discourage more operators coming in and improve services.13 trillion respectively.5 crore) and GMR Hyderabad International Airport Ltd (Rs.This investment was spread over 89 projects.1. 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. is expected to be holding eighth rank in the world by 2014 and fourth rank in next year’s with a GDP of $1. 3. The modernization process will cost the government between Rs.000 crore in the quarter ended January 2006.4 trillion and $2. of travelers and also so would encourage more operators. • More competition and • Rise in industrialization leading to more need of air transport Socio – Cultural Factors . Total investment on hand in airport infrastructure crossedRs.400 cr)to GVK are two biggest investment projects . The government has reduced the average age of aircraft being imported into India for commercial airline operations by five years. 2004. Upgradation of Kolkata and Chennai airports is on anvil.8.6. Two biggest active projects are the Bangalore International Airports Authority Ltd (Rs.1. and a projected growth rate of 6-8%. Reduction on Excise Duty: From January 9. • More investments in aviation.modernize 35 airports in second-tier cities within the next two years. the excise duty on ATF was reduced from 16 to 8 percent. Simultaneously.5 crore). 70 to 80 billion. Delhi (Rs.35. Effect: Improved infrastructure would lead to rise in no.700 cr) to GMR and Mumbai Airport Modernization (Rs. Economic Factors India.

It is the responsibility of the airline department to safeguard the interest of the passengers. 2. Ex. One sure method for airline to cut cost is by increasing the use of e-ticketing. Modernization and privatization of airport: Installation of new technology. Developing Greenfield airport with private sector: . Effect: It will lead to increase in number of tourist passengers thus more encouragement for new operators. Technological Factors 1. There has been an increase in leisure travel by tourists of 15% in 2004. 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. 3.2 million Foreign tourists visited India last year. Growth of electronic ticketing: The electronic industry continues to be plagued by spiraling costs. 1. 2. This has brought in a change in lifestyle.The growing rate of technology & workforce the airline sector generates employment opportunities for well qualified people. 3. 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.No of households projected to be 43. Change in Lifestyle : Average income of middle class household is expected to rise to 194000 Rs by 2010 from 169000 Rs in 2001-02. making cost cutting is a necessary survival tool.6million in 2010. modernization of infrastructure and participation of private players fuel the growth of airline sector. It cuts distribution cost and it also reduced back office accounting and traveler’s can also book ticket sitting on their personal computer. Rise in Leisure travel: Tourism industry grew 8.highest growth rate in the world.Sahara airport.8 per cent over 2003.

Shortage of infrastructure capacity: Aircraft spend useless time circling round airport for want of landing slots and parking bays. whether its high winds. Increment weather can affect air travel in any season. 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. Nonresident Indians . 3. 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. The government has recently increased FDI from 40 per cent to 49 per cent in domestic air carriers. particulate gases. Increase in global warming: Aviation impacts the environment because aircraft engines emit noise. Environmental Factors 1. even on the clearest days. It will add to a rapidly expanding network of domestic airport fuelling socioeconomic growth across the length and breadth of country. 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. sleet or snow. 2. FDI Limits: Forty nine per cent foreign direct investment (FDI) is permitted in financing airport infrastructure as well as in airport ground handling. However foreign airlines are not permitted to pick up a stake directly or indirectly.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. rains. 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.

premium passenger numbers fell from 17% while cargo fell by 23%.7 billion US $ up from 2. The leading airlines started giving lay-offs to bear less loss of the economic slowdown. 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. During third time many airline started i. The industry was affected by the record of high fuel prices and financial markets going globally down. 2. .and corporate bodies are allowed to hold up to 100 per cent equity in domestic airlines. Several private sector owners sat together and demanded concessions from government to protect against high aviation turbine fuel and airport charges. Jet and Kingfisher started giving lay-offs to reduce cost in business. The biggest ever annual falls in revenue in 2009 with drop of us$62billion or 12% to US $467 billion. The growth slowed by 4. The impact of global slowdown and high price of aviation has turbine fuel. 2.7% in 2008. The industry accounts only 2% o the world aviation market and the losses were us$2 billion.net losses were forecasted to to reach 4. Bilateral Treaties: 3.e. Worldwide economic slowdown: The worst to be hit by it was USA but its effect could be seen all over the world. 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.5 billion US $ in December 2008. October 2008: The growth of aviation industry saw a dip of 15% decline in air passenger traffic. October 2009: The slowdown hit aviation industry has started witnessing some stability in passenger traffic. It accounts to 40% of the Indian carrier operating cost compared with 25% to 30%carriers globally.

The airline supply business is mainly dominated by Boeing and Airbus. If borrowing is cheap. For this reason. Brand name recognition and frequent fliers point also play a role in the airline industry. Other has been 14 to 15 % rise in passenger traffic. . While kingfisher warned its employees of delayed salaries reporting to loss of Rs 240 crore and declared it5s flight to cut cost. At first glance.63 million passengers in august 2009 to 3.The figures showed marginal improvement in air traffic from 3. Also one of the reasons for growth during this time was seen as to be low fare and attractive packages by the airlines.59 million in months before. but don't be fooled. “ if the oil prices stay below $50. You'll need to look at whether there are substantial costs to access bank loans and credit. the likelihood of a supplier integrating vertically isn't very likely. there isn't a lot of cutthroat competition among suppliers. Power of Suppliers. the more saturated it becomes for everyone. Power of Buyers. you might think that the airline industry is pretty tough to break into. indigo have been hiring pilots and cabin crew. The more new airlines that enter the market. Also. you probably won't see suppliers starting to offer flight service on top of building airlines. a source from the industry had mentioned. PORTERS FIVE FORCES Threat of New Entrants. An airline with a strong brand name and incentives can often lure a customer even if its prices are higher. then the likelihood of more airliners entering the industry is higher. Airlines like spice jet. In other words. 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. air traffic for 2009 would be same to 2007 -08”.

Competitive Rivalry. . Obviously. Highly competitive industries generally earn low returns because the cost of competition is high. Also as Indian aviation industry is relatively new. passenger comfort and longer lifetime. there are high costs involved with switching airplanes. Is the seat in one airline more comfortable than another? Probably not unless you are analyzing a luxury liner like the Concord Jet. the planes are relatively new which results in better operational efficiency.05 trips per annum as compared to developed nations like United States have 2. personal preference and convenience in the air travel industry. 3.Under penetrated Market : The total passenger traffic was only 50 million as on 31st Dec 2005 amounting to only 0. there has been an increase in number of the international and domestic passengers. the disposable income is also higher which are expected to enhance the number of flyers. Opening of domestic aviation sector to private airlines and strong economic growth are the major reasons for rapid growth in aviation sector. The estimated growth of domestic passenger segment is at 50% per annum and growth for international passenger segment is 25%. Rising income levels: Due to the rise in income levels. What is the likelihood that someone will drive or take a train to his or her destination? For regional airlines. money.The bargaining power of buyers in the airline industry is quite low. Growing tourism: Due to growth in tourism. but also take a look at the ability to compete on service. SWOT ANALYSIS OF INDIAN AVIATION INDUSTRY STRENGTH 1. the threat might be a little higher than international carriers. This can spell disaster when times get tough in the economy. Availability of Substitutes. WEAKNESS 1.02 trips per annum. When determining this you should consider time. 2.

One of them is the deficiencies of airport infrastructure across the country. Despite rapid growth and entrants of several new players there are certain issues which are haunting aviation sector till now. 5. Also India does not have high quality training institutes which can generate required number of pilots or technical people. Unless they achieve profitability within a short time period some of these airlines will find it difficult to compete in this competitive market. 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. OPPRTUNITIES 1. Nearly all the major airports in India are heavily congested and operating environments too are inefficient. 4. technical people. The rapid growth has also been resulted in scarcity of resources particularly for pilots. 3. Due to high sales tax the fuel cost for airlines is sometimes 60% higher than international price. Though recently new airports built in Bangalore and Hyderabad and modernization of Delhi and Mumbai airports have result in relatively better airport infrastructure. 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. Another big obstacle to reaching profitability for Indian airlines is the high fuel cost.2. . Expecting investments: investment of about US $30 billion will be made. With expansion of tourism business this industry will grow directly proportional to it. Also most of airlines have not been able to break even till now. 2. Huge investment requirement for physical infrastructure for airports. Infrastructural constraints: The infrastructure development has not kept pace with the growth in aviation services sector leading to a bottleneck. management people and airlines have to depend on the expats which costs them heavily.

High prices: Though enough number of low cost carriers are already existing in the industry. Shortage of Airports: There is a shortage of airport facilities.  Route rationalization. THREATS Huge investments are expected to take place in aviation sector in near future. One of the biggest threats to Indian airlines particularly in the international segments is the entrant of more matured and cost effective foreign airlines.air traffic control facilities and takeoff and landing slots.  First airline to have a new fleet of airbuses. WEAKNESSES  Still a not in profit organization. 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. parking bays. SWOT ANALYSIS OF KINGFISHER AIRLINES STRENGTHS  Strong brand value and reputation in the minds of customers. 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.  Quality and continuous innovation. 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 the security issues sometimes become matter of concern to the air traffics particularly in the international segment. It is estimated that by 2012. 3. 4. 2.3. 1. copilots and ground staff which is severely limiting growth prospects. . majority of the population is still not able to fly to other destinations.  High ticket pricing. 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. Shortage of trained Pilots: There is a shortage of trained pilots.  Quality of the service.

 Tourism saturation  Economic slowdown. 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. About Kingfisher Airlines:  Since its launch carrier in terms of domestic passenger carried. . London Heathrow and Singapore. within months of its launch. Kingfisher Airlines offers Live TV with 16 channels.  International market. customer service quality and innovation.  The non penetrated domestic market.  It is India's only five star airline. THREATS  Competitors  Infrastructure issues.2 million passengers. it carried 8. the independent airline quality research organisation. Hong Kong.  Besides being the first and only airline in India to offer in-flight entertainment at every seat. For the nine months to 31 December 2009.9 million passengers in the financial year ended 31 March 2009 with a share of 27 per cent of the domestic Indian air travel market.  Kingfisher Airlines carried 10. Internationally.  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. as rated by Skytrax.  Fuel price hike. daily departures (an average of 383 daily departures).  Untapped air cargo market. Facing a tough competition from competitor OPPORTUNITIES  The expanding tourism industry. customer responsiveness and was voted the “Best New Airline of the Year”. It has received numerous awards for innovation.

Ranchi. Aizwal. Vijayawada.8 billion (US$1. Bagdogra. Varanasi. Calicut. eight A321s. Trivandrum. Ahmedabad.  Its fleet of 66 modern aircraft. In total. It employs 7. Jabalpur.9 billion (US$975 million) of that from its passenger business. Patna.  During the financial year ended 31 March 2009. Bhubaneswar. Salem. Jodhpur.1 billion). Coimbatore. The UB Group is also the largest Indian alcoholic beverages (beer and spirits) company and the third largest drinks group in the world. Jammu. Trichy. Nasik. Silchar. Pune. Kolhapur.it also currently serves Colombo.  Kingfisher Airlines is a part of The UB Group – one of India’s largest conglomerates with diverse interests and a global presence. Dubai and Dhaka. Simla. Dehradun. Leh. 23 A320s. Srinagar. Kandla. Sholapur. Madurai. Port Blair. Hubli. Amritsar. with INR35 billion (US$753 million) of that from its passenger business. Agatti. it generated revenues totalling INR38. Bhavnagar. Jaipur. Udaipur. Indore. Mangalore. Nanded. Tuticorin. Tirupati. includes five Airbus A330s. Agra. and Vishakapatnam.2 billion (US$817 million). Nagpur. Imphal. Bhuj. Guwahati. Goa.  For the nine months to 31 December 2009. three A319s and 25 ATR 72-500s and two ATRs. Aurangabad. it flies to 70 destinations worldwide – 63 of them in India – in eight countries. it generated revenues totalling INR55. Chandigarh. Raipur.  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. Latur. Kochi. Dharamsala. Rajahmundry. Kullu. Lucknow. with its main hubs at Mumbai. with INR50. Delhi and Bangalore.  The 58 destinations across India that Kingfisher Airlines will add to the oneworld map include Agartala. Kolkata. Khajuraho.400 staff. with an average age of five years. .

A2 and B in the top 15 metros.  "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)." says Girish Shah. . while 11 per cent felt it deserved top slot. but it was on the backs of the new.000 passengers. grown to a fleet of nine Airbus A320 and expanded from four flights a day to 56. KFA.500 frequent air travellers. When the decision to enter the aviation industry was taken in early 2004. too. marketing. low-cost players.  The way ahead was clear: extend the Kingfisher brand into aviation. and focus on the young business traveller. were slashing ticket prices to cater to the new breed of haveticket-willtravel passengers. flown over 500.  KFA's success carries a simple. where air travel markets are strong. Entrenched players like Indian Airlines and Jet Airway. yet vital lesson: do your homework. Mallya and his team knew the going would be rough.  The 25-million seats Indian aviation industry was growing at 20 per cent. KFA began its ad campaign a few weeks before the launch.THINGS WHICH CREATED IT A BIG BRAND  In seven months after the launch KFA has earned Rs 200 crore (Rs 2 billion).  "The study revealed people wanted a young. head. 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. booking every possible touchpoint relevant to the business traveller. aged 21-45 years from SEC A1. Kingfisher approached market research agency IMRB to assess a possible niche.  So. IMRB interviewed 2. for all the right reasons. trendy.  The challenge for the new airline was to stand out in the crowd.  Equally important. fun and yet premium product.

 Initially. same-day return offers.  "Kingfisher's is a PR-driven communication instead of a regular.999 in a direct bid to lure passengers. They are called "guests" and given gifts at the end of the flight -.  On board. KFA launched its second campaign -. . Newspaper ads. radio spots. "It's inspired from Virgin. passengers watch a safety video featuring model-actress Yana Gupta and can then choose from five video channels and 10 radio channels. and a presence in upmarket stores like Westside and Shoppers' Stop.moderate price points. That was a hit with business travellers. But Indians don't like their good times to be accompanied by huge price tags. advertising-driven communication.  Customer interest was definitely hooked.  To cast its net wider.  All of which ensured good times for the passenger.". Competitions and quizzes with free KFA tickets as prizes ensured customer interest. Media analysts credit a large part of KFA's success to its flamboyant promoter and his directly addressing the press and customers. Attractive cabin crew in designer uniforms.  In mid-August. Once the fish bit. so KFA clubbed its other selling points with a biggie -."Freedom from boring air travel" -to coincide with Independence Day. it was reeled in with special. KFA flights on the crowded Mumbai-Bangalore route were offered for just Rs 1. too. KFA then offered special fares for Central government and defence . even with-it restaurants like Tendulkar's.. where Richard Branson ."  The value-adds have been critical for KFA. .sachets of flavoured tea and umbrellas during the monsoon. too. gourmet meals and personal screens for each seat add to the premium experience. premium clubs like the Cricket Club of India. who usually return within the day. not least because of Mallya himself. focuses more on PR and value-adds.

" Plus. to become a favourite among budget friendly fliers. the holding company of Air Deccan.  "Outsourcing functions allows Kingfisher to cut cost and increase efficiency.  Kingfisher Red Airlines has its major headquarter at HAL Bangalore International Airport. IA staff was also roped in for the ground handling and kitchen duty handed over to Sky Gourmet. allowing it to glide past the inevitable delays at the private airlines' terminals and ensure timeliness. KINGFISHER RED AIRLINE CAPABILITIES  Kingfisher Red Airlines is a subsidiary of the premier Indian airline Kingfisher Airlines.  Growing bigger and better each passing year. the airlines has been re branded twice. "Kingfisher has conveniently sandwiched itself between the upper end of Air Deccan customers and the lower end of Jet Airways. reorganizing and speckling their carriers in dazzling red since. saving up on travel agents' commissions.  A part of United Breweries group of Dr.  The company has been relocating. KFA managed to bag access to the Indian Airlines' terminals at major airports. Air Deccan was picked up by the Kingfisher group from Deccan Aviation. Kingfisher Red Airlines was also earlier known as Air Deccan.  All of which adds up to an effective brand. Vijay Mallya. .personnel and their families."  Now it was time to land the catch. Kingfisher effectively uses online ticketing. The airline is one of the pioneers to provide cheap airfares to domestic and international fliers in the economy class. Previously known as Simplifly Deccan. Kingfisher Red Airlines came about when Kingfisher acquired a major stake in Deccan Aviation. But KFA still has a long way to fly. like low-cost airlines.  The company has designed Kingfisher Red to serve affordable flights to and from domestic and international destinations. thus roping in both the segments.

Kolkata. LAN.500 aircraft. Malév Hungarian Airlines. Jaipur. and around 20 affiliates including American Eagle. BIGGEST ACHIEVEMENT FOR KINGFISHER WHICH ADDS TO ITS RESOURCES. Srinagar. Dragonair.000 daily departures. Cathay Pacific. and their inflight services. making it a convenient and accessible option for clients in South India. • Generate more than US$100 billion annual revenues in total. they have also been successful in maintaining standards on board and in attracting more clientele with their comforting in-flight services and specialized features. Hyderabad. Even so. Australia or Asia’s Middle East.  The alliance enables its members to offer their customers more services and benefits than . Coimbatore.  Russia’s S7 Airlines will join the alliance in 2010 with Kingfisher now on track to follow during 2011.  Connectivity  Kingfisher Red has flights to 64 varied destinations within India.  The secondary hub for the airlines is at Chennai International Airport. Qantas and Royal Jordanian. Guwahati. Mumbai. Chennai.  Oneworld brings together some of the best and biggest names in the airline business American Airlines. LAN Ecuador and LAN Peru. Between them. with some 9. British Airways. • Carry some 340 million passengers a year on a fleet of almost 2. these airlines: • Serve 800 airports in nearly 150 countries. Mexicana. Bangalore. Japan Airlines. Ahmedabad. Important destinations covered by the airline are Delhi. Goa. Finnair. Iberia. LAN Argentina. Ranchi.  It is the only alliance with any airlines based in South America. Operating about 337 flights daily. and Port Blair. their reach to important destinations. Bhopal. Kingfisher Red is gaining popularity because of their scheduled flights. • Offer nearly 550 airport lounges for premium customers.

Delhi. Finnair. It is the only winner of this award since it was introduced in 2003. which include some of the best and biggest names in the industry. .  These include a broader route network.  The agreement was concluded at a meeting between Kingfisher Airlines’ Chairman Vijay Mallya and Chief Executives from oneworld’s 11 existing member airlines. Qantas and Royal Jordanian already serve five gateways in India between them – Bangalore. 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. Hyderabad and Mumbai.350 aircraft operating some 9. British Airways. served by a combined fleet of 2.  Oneworld was voted the World's Leading Airline Alliance for the seventh year running in the latest (2009) World Travel Awards.  India’s leading domestic carrier and only five-star airline.  Kingfisher Airlines’ addition to oneworld will link India’s most extensive domestic network with oneworld’s unrivalled global network.  British Airways will support Kingfisher Airlines through its alliance implementation programme. oneworld also offers more alliance fares than any of its competitors. Kingfisher Airlines.  Established oneworld members American Airlines.000 flights a day.any airline can provide on its own. as its oneworld sponsor. subject to Indian regulatory approval. as the only alliance with airlines based on every continent.  This will expand oneworld’s network to 800 destinations in almost 150 countries. Cathay Pacific. Chennai. carrying some 340 million passengers a year. Japan Airlines.  Kingfisher Airlines today applied to India’s Ministry of Civil Aviation for authority to proceed with its membership of oneworld. It will add 58 cities to the oneworld map – all of them in India. opportunities to earn and redeem frequent flyer miles and points across the combined oneworld network and more airport lounges.

 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. 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.and is right in line with our vision to become one of the world’s top airlines.”  Willie Walsh. oneworld’s sponsor of Kingfisher Airlines. through revenues from passengers transferring to our network from our oneworld partners and the cost reduction opportunities the alliance offers. 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. 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. Chief Executive of British Airways.  Becoming part of oneworld would be one of our most significant steps so far .” RESOURCES COMPETENCES THRESHOLD CAPABILITIES It has matched with all the minimum capabilities i. with frequent flyer benefits extended throughout this network.”  Kingfisher Airlines will fill one of oneworld’s few remaining membership spaces with a carrier that matches our alliance’s demanding requirements.  It will also strengthen us financially.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 . 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.

Finance .Strong marketing stg.Coverage of maximum numbers of domestic routes. . CAPABILITIES FOR COMPETITIVE ADVANTAGE UNIQUE RESOURCE .Strong PR directly addressing the customers. .High focus on customer satisfaction. has a 50% stake in low-cost carrier Kingfisher Red. giving it the highest market share among airlines in India  Kingfisher Airlines. CORE COMPETENCE .business. Through its parent company United Breweries Group. Kingfisher Airlines carried more than a million passengers. 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.Luxury and comfort . . .  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. .Strong financial back up . PHYSICAL AND FINANCIAL RESOURCES  Kingfisher Airlines is an airline group based in India.Unique service experience.  In May 2009.Strong brand value .Celebrity association .Tie up with one world for targeting the international routes. with regional and long-haul international services.Flamboyant image of airline .

Among one of the biggest HR move for KFA was addition of Nigel Harwood as Chief Operating Officer with effect from August 1. KFA’s flight attendants called “Flying models” were selected through a national level model contest. 20 Aircraft are on firm order with options for another 15. KFA signed a “non-poaching alliance” with Air Deccan under which both the airlines agreed not to hire each other’s employee.  It is a young. trendy. to strengthen its management team.  The logo of the flight is of red. which has its bas in Mumbai. HUMAN RESOURCES Prior to launch. Mr. gourmet meals and personal screens for each seat add to the premium experience.  Hence customers have attached value to its strategic capabilities. The order represents the first addition of regional aircraft to the fleet of Kingfisher Airlines. 2005. 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 the one of the most . 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. Vijay Mallya and is under the United Beverages Group.  Attractive cabin crew in designer uniforms. This is part of the UB group’s commitment to human resources”.  Customers have opted for kingfisher for the premier level of services provided. KFA also stressed the fact that its employees had to be capable enough to meet the airlines’ high service standards.  It has four new Airbus A320-200s airlines also.  The ownership of the Kingfisher Airlines is leadership of Dr.  Kingfisher Airlines is among the most renowned airline companies this is one of the fastest growing airline.  This Airline has a Kingfisher bird as its logo due to which it can be distinguished from other airlines quiet easily. fun and yet premium product to which customers look upon. blue and green colours.

This company was launched by the business tycoon Vijay Mallya with the motive of making it number one airline company in India. Chennai. Mumbai.  This popular Airlines has beautiful interiors and the brightly dressed staff which provide courteous services to the passengers at low rates.important Indian luxury airline with an extensive network which spreads to more than 30 destinations.  This was the first Indian airline to start its operations with all new aircrafts. everyday there are there 70 flights which cover around 16 important key destinations in India.  Kingfisher started its operations on 9th May2005 with 4 Airbus aircraft which were taken on lease. Bangalore. .  The trained staff never fails to fulfil the requirement of the passengers which make their journey pleasurable.  The interiors of this flight offer to you world of luxuries and one can avail cheap discounted rates all the year round. Hyderabad.  The chief component of Kingfisher flights is the entertainment system which one can avail.  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. Kolkatta. Delhi. RARITY OF STRATEGIC CAPABILITIES  Kingfisher has been able to create a rarity in terms of service level. In India the flights of Kingfisher Airlines fly to numerous destinations like Ahmadabad. Mangalore and many others. Kingfisher airline at present operates with 11 brand new aircrafts. Beyond any doubts we now see Kingfisher Airlines to be the best in Indian aviation industry. All details related to Flight schedules and status is mentioned on the web.  The passengers can book the tickets online and avail the benefits which are given by the company from time to time.

500 aircraft. Mexicana.  Russia’s S7 Airlines will join the alliance in 2010 with Kingfisher now on track to follow during 2011. oneworld also offers more alliance fares than any of its competitors. Malév Hungarian Airlines. LAN. British Airways. . Australia or Asia’s Middle East. • Carry some 340 million passengers a year on a fleet of almost 2. subject to Indian regulatory approval.000 daily departures. these airlines: • Serve 800 airports in nearly 150 countries. Finnair. It has also achieved to qualify in oneworld group which has given it an extra edge over all the other Indian airline.  India’s leading domestic carrier and only five-star airline. LAN Argentina. with some 9. Kingfisher Airlines. • Offer nearly 550 airport lounges for premium customers. and around 20 affiliates including American Eagle. Japan Airlines. Qantas and Royal Jordanian.  These include a broader route network.  The alliance enables its members to offer their customers more services and benefits than any airline can provide on its own. opportunities to earn and redeem frequent flyer miles and points across the combined oneworld network and more airport lounges. • Generate more than US$100 billion annual revenues in total.  It is the only alliance with any airlines based in South America. Dragonair.  Oneworld brings together some of the best and biggest names in the airline business American Airlines. Cathay Pacific.  Oneworld was voted the World's Leading Airline Alliance for the seventh year running in the latest (2009) World Travel Awards. 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. It is the only winner of this award since it was introduced in 2003. Between them. Iberia. LAN Ecuador and LAN Peru.

 Kingfisher Airlines today applied to India’s Ministry of Civil Aviation for authority to proceed with its membership of oneworld. which include some of the best and biggest names in the industry.and is right in line with our vision to become one of the world’s top airlines. carrying some 340 million passengers a year.  It will also strengthen us financially. with frequent flyer benefits extended throughout this network. The agreement was concluded at a meeting between Kingfisher Airlines’ Chairman Vijay Mallya and Chief Executives from oneworld’s 11 existing member airlines.”  Willie Walsh. British Airways. Chennai. as the only alliance with airlines based on every continent.  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. Delhi. Cathay Pacific.000 flights a day.  This will expand oneworld’s network to 800 destinations in almost 150 countries. through revenues from passengers transferring to our network from our oneworld partners and the cost reduction opportunities the alliance offers. It will add 58 cities to the oneworld map – all of them in India. Hyderabad and Mumbai.350 aircraft operating some 9.  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.  Becoming part of oneworld would be one of our most significant steps so far . Japan Airlines. Chief Executive of British Airways. as its oneworld sponsor.  British Airways will support Kingfisher Airlines through its alliance implementation programme.  Established oneworld members American Airlines. Finnair. . Qantas and Royal Jordanian already serve five gateways in India between them – Bangalore. served by a combined fleet of 2. oneworld’s sponsor of Kingfisher .  Kingfisher Airlines’ addition to oneworld will link India’s most extensive domestic network with oneworld’s unrivalled global network.

Everything about Kingfisher Airlines is . flamboyancy with internal backup of excellent service level which is rare. oneworld’s priority is the quality rather than quantity of our member airlines. It has a strong focus on customer service and its network expands what the alliance currently offers. 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. BUSINESS LEVEL STRATEGIES BASES OF COMPETITIVE ADVANTAGE: THE STRATEGIC CLOCK Kingfisher airlines fall in route 5 that is focused differentiation. which is why British Airways is delighted to be developing our relationship with Kingfisher Airlines further by acting as its sponsor into the alliance.Airlines. said: “Kingfisher Airlines is an ideal fit for oneworld. The prices of air tickets of kingfisher airlines are comparatively higher than other airlines but services rendered are different and excellent. offer a great flying experience.”  Kingfisher Airlines will fill one of oneworld’s few remaining membership spaces with a carrier that matches our alliance’s demanding requirements. ROBUSTNESS The culture at kingfisher is made up of excellent hard working employees who are courteous and yet flamboyant which is rare. ROBUSTNESS OF STRATEGIC CAPABILITIES COMPLEXITY :. advertisement. Justification:  Kingfisher.the complexity is formed due to inter linkage of external PR activities.”  Hence this has became a rare resource for kingfisher.

and the food everything is definitely superior. It starts from the airport itself. checking.  It has an up market image.  It’s the only airline having service of home delivery of tickets. These totally thrive on price as their competitive edge. young & smart attendants. It is important to note that the Kingfisher Red serves complementary meals on board. The planes.  Kingfisher airlines are the only domestic airline that has its standard equivalent to international standards. thereby increasing the perception of ‘More Value for Money’ for the passengers. A red carpet in front of the Kingfisher Airlines counter. It projects the colorful image with red carpet. Kingfisher is targeting those customers that are ready to pay a bit extra for comfort. Staff to take away luggage and do the entire scanning. Fares were very average as it had to target middle class as well as premium class people. One walks out of a Kingfisher flight feeling "good". the seats. etc. ACHIEVEING COMPETITIVE ADVANTAGE: SUSTAINING COMPETITIVE ADVANTAGE: PRICE BASED STRATEGY  Initially Kingfisher airlines did not differentiate between business class and economy class.  Its promotion strategy of its swimsuit calendars.  Vijay Malaya has always use celebrities to have his medium to deliver his products to the customers. music & other accessories etc.  The introduction of Kingfisher Red services have given the airline a ‘LowCost’ option to compete with other ‘No-frills’ airlines. DIFFERENTIATION economy  Initially Kingfisher airlines did not differentiate between business class and . Low cost airlines on the other hand are players like air Deccan & spicejet. parties has been its strategy to concentrate the youths.designed to make one feel good. But eventually they decreased the prices of business class and called those seats as premium seats.

But eventually they decreased the prices of business class and called those seats as premium seats. The seller’s power would be high here.class. They will not have a bargain because there is no competition. They don’t find any good competitor who will enter the market. signing off by saying. which were not available earlier. Accepting each other’s frequent flier miles."  This has created difficulties if imitation as the strategies are personalized. More consolidation means fewer players and hence the monopoly. Share some pilots 3.  Passengers are offered in flight entertainment options and contests like ‘Kingfisher Flying Face of the Month' and attractive discounts of branded merchandise. The introduction of Kingfisher Red services have given the airline a ‘Low-Cost’ option to compete with other ‘No-frills’ airlines. Sharing training facilities 5. which has Vijay Malaya. Cross-selling of tickets 4. Fares were very average as it had to target middle class as well as premium class people. "I have created a product which is better than what I would have created for myself. which is a print campaign to promote its first class service. It is collaboration.  This collaboration will help the customers too. Increased counters to get tickets. It is not an exact Mergers or an Acquisitions. These are the things they will be doing: 1. thereby increasing the perception of ‘More Value for Money’ for the passengers. It is a personalized campaign. Manage fuel expenses jointly 2. One can use the frequent fliers one has earned for destinations. COMPETITION AND COLLABORATION:  Kingfisher and Jet Airways has decided to share facilities to cut costs. If a player controls more than 50% of the market then consumers lose.  The company has just launched Kingfisher First. . Kingfisher Red serves complementary meals on board.

Kingfisher Airlines : Introduction Kingfisher Airline is a private airline based in Bangalore. made a modest entry in the sixties. 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. Thomas Leishman in 1857. The UB Group today controls 60% of the total manufacturing capacity for Beer in India. the Indian subsidiary of the global pharma major Sanofi-Aventis. During the 1950's and 60's. the Group's most visible and profitable brand. Hence the UB group has been expanding and diversifying in development of products beyond the current expertise.has also assumed undisputed market leadership with a national market share in excess of 50%. Hence we can say that the UB group is unrelated diversified. Strategically. The group is headed by Dr Vijay Mallya. India. a move which helped United Breweries to extend its portfolio to wines and spirits business. The UB Group’s Brewing Entity . is a conglomerate of different companies with a major focus on the brewery (beer) and alcoholic beverages industry. Kingfisher Airlines started its operations on 09 May 05 with a fleet of . The company markets most of its beer under the Kingfisher brand. Through a process of aggressive acquisition and market penetration.called United Breweries Limited (UBL) . The airline is owned by the United Beverages Group. CORPORATE LEVEL AND INTERNATIONAL STRATEGY KINGFISHER AIRLINES Introduction to UB group UB group based in Bangalore. First was the addition of McDowell as one of the Group subsidiaries. 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. Kingfisher. The UB Group was founded by a Scotsman. the company expanded greatly by acquiring other breweries.

It has announced plans to start flights to the USA with Airbus A380 aircraft. Kolkata. Agartala. Chhatrapati Shivaji International Airport. with plans for regional and long-haul international services. State governments. Delhi. Offer in-flight silent auctions for lifestyle products and in-flight sales of dry packaged food and beverages. which has Vijay Mallya. Dibrugarh. through one of its holding companies United Breweries Group. and employees of all public sector units in the country. Kingfisher Airlines. Mumbai and Indira Gandhi International Airport. Chennai. signing off by saying. Guwahati. The major destinations covered by Kingfisher Airlines on domestic routes are Bangalore. Mangalore and Jaipur. which is a print campaign to promote its first class service. The immediate families of these personnel are also eligible for these concessions. Delhi. Goa. Hyderabad. Ahmedabad. f. The 'Power Flyer' a consumer incentive offer targeted at the corporate traveller b. The marketing department showcased the airlines as ‘The new flying experience’.4 Airbus A320 aircrafts. launched its international service . the Union Government. Mumbai. Promotion: Various promotional strategies have been adopted by Kingfisher airlines like the following: a. The company has just launched Kingfisher First. Passengers are offered in flight entertainment options and contests like ‘Kingfisher Flying Face of the Month' and attractive discounts of branded merchandise. It is a major Indian luxury airline operating 400 flights a day and has an extensive network to 37 destinations." Need for International Diversity: Kingfisher Airlines. Bangalore. e. one of India's largest domestic carriers. Its main bases are Bangalore International Airport. Cochin. "I have created a product which is better than what I would have created for myself. with a hub at Sardar Vallabhbhai Patel International Airport. It is a personalized campaign. c. Kingfisher Airlines has announced special fares for all personnel serving in the Indian Armed Forces. d. has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary market. Ahmedabad. Pune.

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. The India-to-London flight reaches the British capital after lunch around 2. along with a flight to New York. 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. 2005. and the return flights will be overnight journeys beginning around 10 pm GMT.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.30 pm GMT. MARKET SELECTION AND ENTRY AND INTERNATIONAL VALUE NETWORK: Kingfisher airlines launched its domestic air service operations in May 2005. Non-stop flights from Bangalore and Mumbai to London. Kingfisher has convenient landing and take-off slots for all the sectors. 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.KFA was promoted by UB group and offered a single class. which reinforces our belief that when people pay more they demand higher standards of quality. positioning itself . Hence the globalization and the international business. The Bangalore-San Francisco non-stop flight is a no-brainer because it connects the two silicons . either non-stop or one-stop. A unique non-stop flight from Bangalore to San Francisco is planned for September or October. and from Mumbai to Hong Kong and Singapore.“Kingfisher Class”. Kingfisher diversified diversely. That's one sector in the (aviation) industry that hasn't been affected by rising oil prices or the slowing economy. which Kingfisher Airlines is able to deliver.with daily flights to Europe and Southeast Asia and the US . 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.

Qatar Airways. sleeperette seats with extendable footrests. and they will strive to lead by an example. accompanied with refreshments and music at the airport. Malaysia Airlines. exclusive lounges with private space. In a short span of time Kingfisher Airline has carved a niche for itself. Teamwork: Kingfisher believes that “We will succeed or fail as a team. there is no compromise. In this line of business. and we must work together to ensure our mutual success”. Singapore Airlines and Cathay Pacific Airways.” Values : Safety: This is an overriding value. and three-course gourmet cuisine. Accountability: Every employee in Kingfisher will be held accountable for the successful execution of their duties. Happiness: Kingfisher seeks to build an organisation with people who choose to be happy. Kingfisher is one of only 6 airlines in the world to have a 5 star rating from Skytrax. goodwill and loyalty of customers is at prime focus.as a budget carrier and not as Low Cost Carrier (LCC). with extra-wide personalized screens in the aircraft. An on-board chef and business class seats will come with head-to-toe massagers and Bose headphones. audio and video on-demand. and will endeavour to influence their guests and co-workers to be happy too. value-based and enjoyable travel experience to all our guests. These include personal valet at the airport to assist in baggage handling and boarding. along with Asian Airlines. Product: Premium class seats . commitments and obligations.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. The airline offers several unique services to its customers. Each one of us must respect our colleagues regardless of their rank. Service: In hospitality business customer satisfaction is very important and building trust.

 Laptop and mobile phone chargers in each seat.72 % (c) Jetlite: 7.66 % (e) Indigo: 13. Fullyadjustable headrests. 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. thereby increasing the perception of ‘More Value for Money’ for the passengers. MARKET SHARE REVIEW: PERFORMANCE (a) Kingfisher:26.08 % (b) Jet Airways:16.Strategies .39 % (d) Air India: 17. Price : Initially Kingfisher airlines did not differentiate between business class and economy class. The introduction of Kingfisher Red services have given the airline a ‘Low-Cost’ option to compete with other ‘No-frills’ airlines. Fares were very average as it had to target middle class as well as premium class people. It is important to note that the Kingfisher Red serves complementary meals on board.29 % (h) Paramount: 2.  Comfortable pillows and snug blankets.75 % (f) Spicejet: 11.27 % Kingfisher Airlines . These kind of unique service features is not being offered by any of the local Airlines. 48" seat pitch and a 125° recline.72 % (g) Go Air: 4. 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. Sleeperette seats with extendable footrests. But eventually they decreased the prices of business class and called those seats as premium seats. 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.

and in-flight entertainment systems. • The company came up with only one class airlines rather than other airlines that had Business Class. KFA started its operation in May 7. The following initiatives were taken as part of its promotional strategy… . KFA managed to corner a 6% market share in the domestic air travel mark.KFA was promoted by UB group and offered a single class. 2005. • 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.Kingfisher airlines launched its domestic air service operations in May 2005. positioning itself as a budget carrier and not as Low Cost Carrier. Within the first six months of its launch. KFA has set its sight to become India’s largest airline both is capacity and in market share. • The company made its mark by providing its guests with more legroom and bigger seats so as to provide better comfort. Economy Class the idea was to combine Business Class experiences and Economy Class experiences in one. 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. • The company started addressing its customers as “GUEST” rather than passengers. 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.“Kingfisher Class”. • KFA is also launched Kingfisher express in order to tap into the growing LCC segment. Having a single class freed up more leg space for passengers when compared to normal economy class flights. KFA’s Promotional Strategies As part of its promotional strategy the marketing team of KFA showcased the airline as “the new flying experience”.

999. don’t play like one”.Passengers could avail off this offer if they showed there Jet Privilege Member (Gold or Platinum) card. which conveyed youthfull. Advertisements hoardings at airports depicted the stylish interiors of the “Funliners”. which was dominated by Jet Airways. and five A330-200 aircraft. for 5 new A350-800 aircraft. 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. By offering a “King Saver Booklet”. celebrity golf matches.  KFA targeted the frequent fliers business traveler segment. restaurants. in August 2005. This booklet contained six free flight tickets and was presented as a free gift if the passenger bought two such booklets each worth Rs.the movie.  KFA made use of various fashion shows. and world class image.  The UB groups monthly magazine called “Pegasus” published information about KFA along with other information related to UB group. fun-filled.  KFA was the official travel airlines for the cast and crew of “Mangal Pandey”.  INOX multiplexes in Mumbai publicized KFA’s special offers for a month. 26. KFA launched “Chill Times Offer” in the month of August 2005 and September 2005. access to 180 golf clubs across India.  KFA launched many attractive offers to promote its sales like the “King Card” in association with ICICI Bank. • In June 2005 KFA planned to order US$5 bn at the Paris Air Show. special invites for lifestyle shows . New Year parties all to build its “Kingfisher” brand. free refreshments at airports. This was ment to creat loyal customers for KFA by providing benefits like privileged access to lounges.  In October.  In October they launched the “King Saver Offer” which said “Fly like a King. .

. But KFA had yet to receive permission from the Indian government. was too high. to strengthen its management team. Awards and Recognition: Within a short span of four years. According to Indian government domestic air carriers are not allowed to fly international routes without five year of domestic flying experience. Mallya said “Kingfisher Airlines Limited has a first class management team not just at top most level but also in the second line. a subsidiary in US for its international operations. KFA’s flight attendants called “Flying models” were selected through a national level model contest. But Mr. it would start an airline in a foreign country and fly it to India. Mr. KFA plans to operate international routs by end of 2007. KFA also stressed the fact that its employees had to be capable enough to meet the airlines’ high service standards. KFA set up Kingfisher International Inc.How ever negotiation came to a standstill when KFA felt the valuation of Sahara Airlines of around US$750mn to US$1 bn. • • Human Resource Strategies Prior to launch. Kingfisher Airlines has received many international and national awards. To further its expansion plan KFA put in its bid to buy Sahara in November 2005. KFA signed a “non-poaching alliance” with Air Deccan under which both the airlines agreed not to hire each other’s employee. This is part of the UB group’s commitment to human resources”. 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. This ATR72-500 was worth US$750. Among one of the biggest HR move for KFA was addition of Nigel Harwood as Chief Operating Officer with effect from August 1. Mallya said if he failed to convince the government to change its rules. (KII).KFA was first Indian carrier to place an order for A380s. 2005. In November 2005 it placed an order for 30 A 320 and 20 ATR72-500 aircraft at the Dubai Air Show.

80 domestic airports and 28 civil enclaves.Kingfisher Airlines awarded by NDTV. NDTV.The prestigious • Rated amongst India's most respected companies .Ranked amongst the Top Ten buzziest brands of 2005 & 2006 across product categories. 1 Airline in customer satisfaction . • The Best Airline and India’s Favourite Carrier .In a Survey conducted by IMB for The Times Of India. • Economic Times Avaya Award 2006 for Excellence in Customer Responsiveness . . The Airport Authority of India (AAI) manages a total of 127 airports in the country. Business World.Survey conducted by Planman Media.Award is Presented by the highly acclaimed Business Daily.Pacific and Middle East region. • Rated amongst Top Ten Internet Advertisers . India is one of the fastest growing aviation markets in the world. driven by privatization of aviation industry and introduction of low cost carriers like Deccan Airlines.Business World. 7 custom airports. The Airline industry has experienced a drastic increase in number of passengers. • India's No.Business World • NDTV Profit Business Leadership Award for Aviation . Economic Times. • Rated amongst India’s 25 Innovative Companies . Go Air. which include 13 international airports. air passenger travel in India has been expanding at about 25% a year. • Brand Leadership Award . There are over 450 airports and 1091 registered aircrafts in the country. • Rated amongst the top ten in the Best Television Commercial Jingles NDTV.Centre for Asia Pacific Aviation (CAPA) Award in the Asia . and Spice Jet etc. GROWTH SHARE or BCG Matrix: Ever since the aviation sector opened up the skies to private carriers.Yahoo India.com and Brand Reporter.in the service and hospitality segment against several acclaimed hotels. leading banks and other airlines. in the survey conducted by agencyfaqs. • Buzziest Brands of 2005 . • Best New Airline of the Year .

The estimated growth of domestic passenger segment is at 51% per annum and growth for international passenger segment is 26%.  The company came up with only one class airlines rather than other airlines that had Business Class. PRODUCT DEVELOPMENT:  KFA is also launched Kingfisher express in order to tap into the growing LCC segment. moreover Kingfisher Airlines in leading at No. 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.Hence the Indian aviation market is on a boom. 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. Economy Class the idea was to combine Business Class experiences and Economy Class experiences in one. Public Sector Portfolio Matrix: KFA here in this matrix will come under the Golden Fleece. Hence we can analyze KFA as Stars in the BCG matrix. .  The company made its mark by providing its guests with more legroom and bigger seats so as to provide better comfort. as its ability to serve is high and the public support and funding attractiveness is low.  Showing customers additional benefits along with the primary benefits. and in-flight entertainment systems. 1 with market share of 26.  It is trying to aim even the first time as well as more repeated customers to give them additional benefits.08%.  The company gave best services to its customers that were like providing world class interiors.

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. E.  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. (Flight services).  Non-stop international flights. Looking at dramatically changed world . the customer income is increasing and can they can afford to fly in this airline.  Services given can be increased or given at discounted prices. Loyalty and frequent flyer programs are planned. INTERNAL DEVELOPMENT:  The best services with unique features were provided to the customers. DIVERSIFICATION:  It is planning to go for international services.  Providing better flying experience. WO (taking advantage of opportunity to overcome weakness)  The increasing tourism industry can be targeted and taken advantage of.  Enhanced service level. WT (minimize weakness and avoid threats)  Horizontal integration can be done in order to save oneself from price war and intensive competition. BEBEFITS OF MERGER : The economic recession was taken an an opportunity.  Better route plans.  It can do contracts with pilot training institutes as there is shortage of pilots. First airline to have a new fleet of airbuses.  Kingfisher Red can cater to more customers as its prices are less.  The new comfortable seats. 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.g.  The competition it is facing is much high which is hampering its growth as a whole.  First Airline Company to order Airbus.  Quality of service and continuous innovation is the strong factor to capture the market in large size.

Kingfisher Airlines tickets can be purchased by: o Calling up our Call Centers o The Kingfisher Airlines website (www. Expected savings of about Rs 300-400 crore (Rs 3-4 billion) annually to accrue because of the synergies achieved due to the merger. who are potential fliers in both India and China. ORGANIZING FOR SUCCESS Structure Processes • Fare options/Booking options/Home delivery We are committed to making our tickets easily available to our Guests.5 billion people. • Amendments and Cancellations . The implementation of network strategy and good understanding of the customers were implemented to increase the revenue. Our International guests can book and make payments through their credit card. 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. a rebooking will be allowed on the lower fare level after paying a seat release charge.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. An increase of Rs 300-400 crore in the first six months in the bottom line once we launch the international operations.flykingfisher. The resultant negotiation power and costs saved in fuel and maintenance will be the added benefits.scenario and a pool of about 2. In case a lower fare level is available after a Guest has made his booking. 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. The main idea was to increase revenues on every flight the take-off and increasing capacity and not pricing. Our fares are quoted in Indian Rupees and in US Dollars.

Bagdogra. cancellations and diversions as early as possible. Pune. At Kingfisher Airlines our Guests can amend or cancel their tickets up to one hour before the scheduled departure of the flight. Chennai. Goa. eg. SMS KING to 6388. Bhuj. Varanasi. • Checking-In . Ahmedabad. Jaipur. Mumbai. • Overbooking We operate with the objective that no Guest with a confirmed reservation should be denied boarding. Mangalore. Bhubaneshwar. • Valet assistance As a value added service. Keeping this objective in mind we commit to as many Guests reservations as the number of seats on each flight. • Terminal locations Currently Kingfisher Airlines operates to Agartala. Kolkata. Srinagar. This assistance is available from the time you reach the airport to the time you Check-in. Hubli. Indore. Raipur. the refund will be processed in the same medium in which the ticket was purchased. and through the point of sale. Bangalore.We understand that our Guest could be in a situation where they have to amend or cancel their tickets. Delhi. • Keeping you informed At Kingfisher airlines we are committed to keep our Guests informed in case of known delays. Imphal. Vijayawada and Vishakapatnam airports. For details of cancellation and seat release charges please see the Conditions of Carriage section. Coimbatore. Assistance is also available on arrival at the airports. Valet assistance is available at all airports. Kochi. Hyderabad. Nagpur. 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. Tirupati. • Refunds On cancellation of a booking. Guwahati. Trichy. Trivandrum. Agatti Island.

Kingfisher Airlines is the first airline in India to launch this unique service. Guests are offered meal subject to the airport facilities and local infrastructure. Guests have the choice of opting for vegetarian or non vegetarian meals on most sectors. The availability of multiple Check-in counters and the presence of efficient staff help reduce congestion. • Meal options We offer our Guests complimentary meals on all our flights. 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. Guests are offered refreshments in case the delay is more than one hour. Guests have the option of Live TV. Now guests with hand baggage need not wait at the check-in counter to collect their boarding pass. • Roving Agents No more waiting at the Check-in counter. At this stage. Fun TV and 10 audio channels on Kingfisher Radio with choices appealing to every segment's expectations. In case of longer delays. • In-flight entertainment At Kingfisher Airlines. All efforts are made to ensure that you have a wide selection every time you fly with us. we make all effort to minimize the inconvenience. The menus are designed . Specially trained Roving Agents will reach out to guests and check them in using a mobile digital device and printer.hop to rock music. we take pride in being the first domestic airline in India to offer personalized In-flight Entertainment.All efforts are taken to ensure a smooth Check-in. The video choices range from Sports to fashion to an exclusive channel for kids. They can directly approach the security check-in counters. Another unique feature of our In-flight Entertainment system is the on screen moving map that let you know the Funliner's location. • Delay Handling In case of delay at the airport. speed and other relevant flight details. which translates into less waiting time at the counters and 'On time' departure of our flights. altitude. Similarly the audio channels range from Ghazals to hip.

To ensure that the Guests get different choices every time they travel with us. This commitment is clearly established by the fact that our personnel at various functional areas are well trained to handle your special needs. When a misrouted baggage is tracked we attempt to deliver it at our expense at the time convenient to the Guests. • World class crew Our Crew is personally selected by the chairman. Delivery of baggage for international destination in case of transit. may take some time considering the longer flight duration. To enable us to serve you better we request you to inform us about your special needs within a reasonable time before your travel. • 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. use facilities and disembark in comfort. They undergo a rigorous training program in the Safety and First aid. • Your special needs We at Kingfisher Airlines are committed to provide a seamless travel experience to our guests who require special assistance. These Guests are assigned seats closer to the exits and lavatories so that they can board. Service Delivery and Personality development before they are cleared to take on the role of hosts on board. Details about our policy on lost baggage can be viewed in the Conditions of Carriage section. • Unaccompanied Minor .considering the Guest feedback and are frequently changed to meet their changing tastes. Special care is taken even while assigning a seat on board the flight. availability of flights and custom and immigration procedures. Kingfisher Airlines representatives are present in the arrival lounge should you need any assistance on account of bulky baggage. we have six different types of menu which are changed everyday. • Baggage Delivery We at Kingfisher Airlines endeavor to reunite your checked baggage with you as soon as you reach your destination.

Kingfisher takes their employee as resources. Similarly senior citizens also have the option of availing wheel chair assistance if required. 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. but chances are they'll soon be absorbed in the adventure of stretching their own little wings. 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.Flying alone can be a thrilling experience for kids. At the destination our staff escorts the child to the arrival terminal and meets the person named on the UNM form. boarding and disembarkation can also be availed. . Help in check-in. especially with a little advance preparation. Children may be nervous at first. and they work together to ensure their mutual success. Children in the age group of 5 to 11. ENABLING SUCCESS Managing People People as a resource Kingfisher will succeed or fail as a team. Besides. a personalized briefing is also conducted on the flight for Visually impaired Guests. Our flight attendants are formally updated about Guest's requirements on board their flights. Our flight attendants take special care of the child to ensure a comfortable and enjoyable flight. An escort with a wheel chair can be assigned to the Guest. Each one of them must respect their colleagues regardless of their rank. Only after checking the credential of the assigned person is the child released. holding a confirmed reservation and traveling alone qualify as Unaccompanied Minors. Guests with reduced mobility and other Guests with special needs to familiarize them with the safety and service aspects of the flights.

Kingfisher employee work in team and they have collective behavior among themselves. Kingfisher has HR Management Information System which keeps record on performance of the human resource. HR function Recruiting quality people is a major plus point of the kingfisher. 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. 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) ( Secondary Hub) Indira Gandhi International Airport Focus cities Ahmedabad . Managing People The crew members of Kingfisher are paid more than their counterparts in any other airline company in India.They train them in such a way that the do a value addition in the organization. The employees are paid good salaries and performance based incentives to motivate them even more. 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. 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.

• Kingfisher Airlines has launched “Five Star Privileges” . Vijay Mallya. It placed orders for 5 A380s. Kingfisher Airlines is also the first Indian airline to order the Airbus A380. CFO Kingfisher Airlines currently operates with a brand new fleet of 8 Airbus A320 aircraft. formed alliance (October. • Kingfisher Airlines has deferred deliveries of some Airbuses (EAD.The conclusion of this agreement could help passengers . Germany(2009).to travel further on the network of these global airline.Chennai Hyderabad Kolkata Frequent flyer program King Club Fleet size 75 (+139 Orders. India Key people Dr. 5 A350-800 aircrafts and 5 Airbus A330-200 aircrafts in a deal valued at over $3 billion on June 15. Kingfisher airlines and Jet airways (used to be competitors). especially from smaller cities . 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 . wary of . • Kingfisher Airlines captures market share with strong passengers in February 2009 as per the latest ministry of Civil Aviation data. 2005. EVP Mr. With the sign of trouble in aviation industry.an exclusive program that entitles guests to avail of great deals at partner establishment around the country. 25 Options) Destinations 77 (Including routes servedKingfisher Red) Parent company UB Group Company slogan Fly The Good Times Headquarters Bangalore. Raghunathan. • Air France –KLM is in talks with Jet Airways and Kingfisher Airline for having a codeshare agreement . A. CMD Mr. Hitesh Patel. EVP Mr. Rajesh Verma.PA) aircraft. It was the first airline in India to operate with all new aircrafts. 3 Airbus A319-100 aircraft and 4 ATR-72 aircraft.

making it one of the single largest stakeholders in the Airbus order backlog by number of planes.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. has five A380 super jumbos on order . • Indigo . a unit of alcoholic drinks maker UB Group . • Recently. it has announced management change . scheduled for delivery from 2012 . • Kingfisher Airlines Ltd in talks to lease out two of its Airbus A330 planes to Nigeria’s Ank Air.How ever negotiation came to a standstill when KFA felt the valuation of Sahara Airlines of around US$750mn to US$1 bn. as well as 20 A350 Aircraft scheduled for delivery from 2013. • Deccan aviation Ltd has changed its name to Kingfisher Airlines Ltd. • Air India has rejected the Jet Airways(India) Limited-Kingfisher Airlines Ltd offer to join their Alliance. was too high. has negotiated with Airbus to defer deliveries of 32 A320-family aircraft to 2010-2012 from2008/09. 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. which owns discount carrier Deccan Aviation DECA.overcapacity as airlines struggles to cut costs to offset high fuel prices and softer demand. It also has a further 20 A330/200 aircraft on order . .BO. with a cap of just below 26%. • 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. The Airline . Kingfisher.

According to Indian government domestic air carriers are not allowed to fly international routes without five year of domestic flying experience. Mergers and Acquisitions Dec.. . Mallya would be the chairman and CEO of the merged entity. 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. KFA plans to operate international routs by end of 2007. valuations and swap ratio will be worked out by accountancy firm KPMG. May go for arrangement fashion shows (horizontal diversification). (KII). May go for other services like international flights (concentric diversification).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. Mallya said if he failed to convince the government to change its rules. Shares of Deccan Aviation have doubled in a little over a month in anticipation of a reverse merger of Kingfisher Airlines into Deccan Aviation. But Mr. and IA. etc. Sahara. KFA also allowed multiple fare options and auctioning of tickets on all traffic routes. delayed flight timings. Kingfisher follows a dynamic fare policy and the fare levels fluctuate depending on the number of bookings made / anticipated on a particular flight. a subsidiary in US for its international operations. the airline was called a budget airline and not an LCC. to KFA as well. But KFA had yet to receive permission from the Indian government. Fares were above those of LCCs but lower than the economy class fares of Jet. while executive chairman of Deccan. Captain G R Gopinath would be the vice-chairman. 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. it would start an airline in a foreign country and fly it to India. Details of Deccan-Kingfisher merger. KFA set up Kingfisher International Inc. Hence.

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 . It purchased brand new A320 aircrafts powered by the cockpit that was a paperless environment.0lacs.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. 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. 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. To come over the financial crisis the KFL is considering an option of retrenchment. 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 was first Indian carrier to place an order for A380s. 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. 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.

any technical snag would adversely affect on the travellers as only a refund is made and no alternative travel arrangements are done . • The company has hangers at the major airports in order to increase their revenues while cutting down the costs. Keep their guests informed in case of known delays. For Example. 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. Many doubt how long these no-frills airlines can survive in the market. which only a few competitors survived. In Europe.industrial towns and cities in India. Telephone numbers are accessible 24 hours Easy availability of tickets. low cost airline boom was followed by a bust. according to analysts. bilateral discussions over seats and code-sharing between the carriers. cancellations and diversions. The company has got a sound infrastructure to support its cargo operations and they should take advantage of this before their competitors. Easy accessibility to Guests. Seek additional distribution channels such as more tie ups & collaboration. Since low cost airliners depend on maximum utilization due to lack of stand-by aircraft. Valet Service Checking-In. Amendments and Cancellations up to one hour before the scheduled departure. try seeking collaboration with international carriers. 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.

customer service and value-added services. They will not pay more for just mere entertainment or watching TV in a flight of one or a half hour journey. Inefficient Air traffic controllers. service is the main thing provided by their larger peers. do away with. They may sellout after . The dishonesty of travel agent who usually do not push their seats as that of the rival’s. The revenue per seat is low. Current number of pilots in India is over 1. many smaller airlines without deep pockets fell by the wayside unable to sustain the predatory pricing techniques adopted by their strong opponents. which could have been easily.Experts say that airlines compete primarily on three fortes such as price. Poor airport infrastructure such as few landing slots. The Indian customers are not that much mature as compared to their American contemporaries. The critical factor will be the ability to keep costs low and the offer of an on time service at an affordable price. shortage of skilled personnel. as happened in USA. Overhauling costs is another major hurdle. A certain amount of churn and turmoil for players who don’t have the deep pockets. While no-fillers fight the price war. Taxes like passenger service fee which is Rs. So it may be possible that some of the players may not even be in the game for long. for survival. despite the infrastructure constraints. According to aviation ministry sources. 99. The next issue to tackle is to properly position itself in the aviation market. For example. The outdated Aviation rules in India which compels the airlines to add more to their operating cost. 221 on one seat looks ridiculous for a ticket worth Rs. the money that is coming to the sector is from dubious origin in several cases & is from investor seeking quick returns. not yet automated systems prone to human delays and errors.500. 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 company made its mark by providing its guests with more legroom and bigger seats so as to provide better comfort.listing on the stock market or get bought out. Having a single class freed up more leg space for passengers when compared to normal economy class flights. 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. . KFA has set its sight to become India’s largest airline both is capacity and in market share. The company started addressing its customers as “GUEST” rather than passengers. Economy Class the idea was to combine Business Class experiences and Economy Class experiences in one. The company came up with only one class airlines rather than other airlines that had Business Class. once the market starts consolidating. and in-flight entertainment systems. The company gave best services to its customers that were like providing world class interiors.