A Project on Kingfisher Airlines | Airlines | Aviation

A Project On Kingfisher Airlines

Team Members: Neha Kulkarni Swakul Naik Shrutika Sawant

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Kingfisher served the corporate and business travel segment.INTRODUCTION Kingfisher Airlines acquired 26% stake in Air Deccan’s parent company Deccan Aviation. The major participating factor behind the deal was chance for kingfisher to go international within first 5 years. . A combined fleet of 71 Airbus A320 Aircraft operate 537 flights to 69 Indian cities.

The Airlines Strategy Failed to understand customer needs.Problems faced by Kingfisher Kingfisher Red with high class services lead o costs shut up. . Kingfisher failed to understand that customers were more interested in reduced prices than services. Due to the high cost the prices of tickets had increased.

Restructuring of routes of Air Deccan which lead to cost sensitive and thus people shifted to economical variants like spicejet and indigo.Cont…… Another problem it focused more on international services than domestic which lead to investing ample of cash. .

7000 crore. The airlines missed out to raise Rs. Kingfisher was forced to take a loans form Banks which now have a total exposure of Rs. It reported a net loss of Rs.Consequences of Problems The airline today is saddled with total debt of Rs 8000 crore.7600 crore to 14 banks. 469 crore for September quarter because of increase in fuel prices and inability to hike fares due to competition. It is also struggling to meet its working capital needs. It owns close to Rs. 1000 crore through global depository receipts. .

. salaries to employees. This led to employee strikes and cancellation of flights and also closed down its low cost carrier Kingfisher Red.Cont…. The frozen account has disrrupted payments to suppliers. The bank accounts have been frozen by income tax authorities.

Investment in Planes Financial Risk .Excessive Debt Operational Risk – Fuel Costs .Risk Management Failure  Strategic Risk – Market Analysis  Strategic Risk – Merger with Air Deccan  Strategic Risk .

Is the problem still existing? The problem is still existing Cancellation of flights. . The salaries of pilots have not been given for the last two months. forcing the frustrated staff to go on strike.  Passengers' dissatisfaction and Pressure of Directorate General of Civil Aviation (DGCA) are the prime concerns that continue to trap the king of good times. Till date the airline has accumulated a loss of more than Rs 6000 crores.  Resignations of pilots.

Why are the problems still existing? Oil companies like IOC. leaving the airline struggling to streamline its daily requirements. Now lenders are firm on not assisting the Kingfisher airlines further unless the company clears all its previous dues. BPCL and HPCL have already taken their hand back from Kingfisher to supply jet fuel. Oil is the primary expense for the business and its increased price in the recent past has also contributed for the loss of revenue for the Kingfisher and the airlines cannot control this.  Banks now find it difficult to provide more funds to the financially starved airline and defend its actions. .

Kingfisher. As Kingfisher Airlines failed to meet the deadline for clearing dues.The worst of worse  The airline is not able to pay the staff or the Airports Authority of India refuses to give credit to the airline. The nonpayment of TDS too has resulted in the freezing of bank accounts of the airline by the Income Tax department . the service tax department has frozen some more bank accounts of the king of good times. it can get its license suspended. the Central Board of Excise and Customs froze most of its accounts. Kingfisher is badly trapped due to the big money losses. The airline was asked to pay Rs 10 crore as arrears within a week but again due to the missing of deadline.

Suggestions This business requires full time attention and it seems that Mallya being very busy in running his diverse businesses is unable to focus his attention on the Kingfisher. .

Thankyou .

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