Group discussion on KFA

Introduction

• Owned by “Dr. Vijay Mallya” of United Beverages Group.

• Started its operations on May 9, 2005, a flight from Mumbai to Delhi.

• Kingfisher was the largest carrier in the shrinking domestic Indian market

• December 2009, Kingfisher Airlines had the second largest share in India's domestic air travel market.

• Passenger growth increased 61.1% year-on-year in Mar-2009

Vision

“The Kingfisher Airlines family will consistently deliver a safe, value-based and enjoyable travel experience to all our guests.”

Values

Safety

Services

Happiness

Teamwork

Accountability

Rise Of The King

• First airline in India to operate with all new aircrafts.

• First airline in the country to order the “Airbus A380”.

• Offers several unique services to its customers.

• First Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights.

• Alliance was formed with Dish TV to provide live TV in-flight.

Achievements

• Kingfisher Red, Kingfisher Airline's low-cost class on domestic routes.

• Kingfisher Airlines has received three global awards at the Skytrax World Airline Awards 2010

• Brand Leadership Award.

• India's only 5 Star airline, rated by Skytrax and 6th airline in the world

Extensive Network Providing the Widest Domestic Reach

• Before Downfall:

Service Marketing Mix

• Product: – King Mobile: First Indian airline to launch Services on Mobile

• Check Flight updates

• Buy tickets through sms or

• Access a world of service through a simple mobile app anytime anywhere

– Little Wings: Onboard experience which promises to be full of delightful & unforgettable moments • The airlines call its passengers as ‟guests‟ and as soon as the flight takes off, they'll

soon be absorbed in the thrill of stretching their own little wings.

– Kingfisher Holidays: • This scheme provides its passengers with King Miles which one can redeem for stay

in hotels, car rentals etc.

– Kingfisher Elite: In today’s competitive business environment, the pressure on productivity, cost and efficiency are greater than ever before.


– Kingfisher Elite: In today’s competitive business environment, the pressure on productivity, cost and efficiency are greater than ever before. • Kingfisher Elite offers exclusive travel solutions.

• One can Fly at one’s own convenience anywhere, anytime and choose who flies along with them in the utmost comfort, safety and privacy.

• Be it business or leisure, one can select from the range of business jets and provide the most exquisite service complimented with the highest safety standards, allowing one to arrive to their destination relaxed and refreshed.


• Price:

• The price segments that Kingfisher targets is the higher income group as well as the upper middle class background.

• There are a few segments that are majority of the youth and high lifestyle segments.

• The pricing is also done keeping in mind those people who are ready to pay for luxury.

• Initially Kingfisher airlines did not differentiate between business class and economy class. But eventually they decreased the prices of business class and called those seats as premium seats.

Prices

Quality

Services Variety

• Fares were very average. • They targeted middle class as well as premium class people. “A Low-Cost” option has been

given by the introduction of Kingfisher Red services to compete with other, No- frills’ airlines. • The Kingfisher Red serves complementary meals on board, thereby increasing the perception

of More Value for Money for the passengers

Pricing Strategy

Pricing Strategy

Class of Travel

Load Factors Date of Travel

Day of Travel

Festive Seasons

Weekdays Business Class/

Economy Class

No. of Bookings

Differentiated Strategy Offers


• Place: – It was one of the Largest Domestic Airline with a Fleet of 60+ aircraft

– Connecting 61 cities in India including 8 international destination

– Flight Booking • Book in Person

• Travel Agents

• Online (CHANNEL SHIFT)

• India’s First ‘FLYBUYSMS’ Service


• Process:

– The process of kingfisher airlines services lays emphasis on the involvement of channels, • front line staff, • travel agency offices, • offices of tour operators, • or so from where the services flow and reach to the ultimate users.

– The process begins at the time of reservation and goes on up to the confirmation of seats.

– By giving details of where to book and how to book kingfisher airlines help in providing quality services to its customers..

– They also offer concession by not charging any cancellation charges and also giving them options to make a change in the reservation status if they required.

– Facilities at the airport, • the baggage handling, • flight information, also helped in delivering quality service and making travel a pleasure.

– Kingfisher Airline is making every effort to constantly redefine service procedures to enhance service satisfaction levels.

– In aircraft • the meal service, • in flight entertainment, • reading materials, etc. enables the customers to have an enjoyable and convenience.


• PHYSICAL EVIDENCE:


• PHYSICAL EVIDENCE:

Physical Evidence

Comfort

Billing System Interior

Designing


• PHYSICAL EVIDENCE: – At Kingfisher Airlines, the aircraft by itself, the seating configuration which is

meant to be comfortable and spacious and the in flight food provided, constitute the physical evidence in this service.

– The seating is such that it is comfortable and there is enough leg space.

– Kingfisher has introduced new sleeper seats which electric controls for reclining lumber support, leg rest extension, expanded seat back and thus providing highly comfortable seating.

– Booking offices and ticket counters are extremely spacious and well designed with good looks.

– Domestic lounges are enhanced with good interiors and basic amenities which make it an ideal place to conduct business, entertain and relax.


• People – At Kingfisher Airlines, people are the most important.

– People provide most services that is selection, training and motivation of the employees.

– The airhostess at kingfisher come in contact with the customers in the process of providing the service, while the cock-pit crew are the employees who contribute to the service product but there is no direct contact with the customers.

– The frontline staff plays an important role in order to make sure that the service has been delivered to the customers in an apt and an efficient manner.

– Kingfisher Airline’s cabin and ground crew is the hallmark of their services.

– The quality of staff service is impeccable and the airline is able to sustain these high quality levels as they experience continued and rapid expansion people that is the staff deliver high standards of service efficiency, and in a sincere and charming manner that makes it stand out from the rest of the airlines.

– The airline also provides the crew to undergo rigorous training programs. The airlines has also instituted the Kingfisher Training Academy to cater to the growing demand for trained service oriented professionals.


• Promotion:

– As a part of its promotional strategy kingfisher’s marketing team showcases themselves as the “the new flying experience” in the aviation industry.

– Advertisement hoardings at airport depicted the stylish interiors of the fun liners‟ which led them to the following advantages:- • It has built up a long term image for the product.

• This hoardings put by them to repeat the messages many them.

• The artful uses of the color and print led to convey a youthful, fun-filled and world class image..


• Promotion:

– Besides this INOX multiplexes in Mumbai publicized KFA’S special offer for a month.

– They promoted greater consumer awareness for prices.

– This gave Kingfisher a great deal of competitive advantage with respect to other low cost airlines.

– KFA was the official travel airline for the cast and crew of Mangal Pandey and gave a warm welcome to all the guests who attended the premiere of the film. In addition to that KFA as a low cost airline also followed some other promotional strategies which are listed below:- • Organized the guest speakers at the seminars and present their ideas on the areas of their

expertise.

• Sponsored many cultural events and have celebrity endorsements.

• Sponsored sports team and charity events.

• Designed image logo for the company.


• Promotion:

– The organizing of events have given them a lot of advantages to establish their brand name. To enlist a few:-

• It increased awareness of the company and helps to enhance their brand name.

• It upraised their corporate image.

• These promotional tools helped KFA to express commitment to the community and social issues.

• KFA made use of various fashion shows, celebrity golf matches, New Year parties all to build its “Kingfisher” brand.

• In October, KFA launched “Chill Times Offer” in the month of Augur.

• KFA launched many attractive offers to promote its sales like the “King Card” in association with ICICI Bank, in August 2005. This was meant to create loyal customers for KFA by providing benefits like privileged access to lounges, restaurants, free refreshments at airports, access to 180 golf clubs across India, special invites for lifest. Thus by implementing all this measures kingfisher succeeded to have a loyal customer base.

Powerful Marketing Efforts Drive the Kingfisher Brand Strength

Significant Marketing Synergies from Parent Group Branding

• Leveraging Group Marketing Assets

Partnerships & Frequent Flyer Program

SWOT Analysis St

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Strong brand value and reputation in the minds of the consumer.

UB group as the parent company. Quality service and innovation. More than 80 destinations. Less than 100 people (employees) per

aircraft.

High maintenance cost at ground and airline.

High ticket pricing (KF First & Class). Tough competition from Indian as well

as international players. Heavy Debt.

If able to survive for a couple of years, then can have a big market share.

Expanding tourism business. Reputation of providing the best

Quality & Services in Indian skies. Growth in air travel, with businesses

and markets doing better.

Rising Fuel Costs. Rising Labour Costs. Other low cost airlines providing

better services. Government initiatives in railways

with fast running trains like Duronto. Economic slowdown.

Porters Five Force Model

Threat from Competition

Threat from New

Entrants

Bargaining Power of

Customers

Threat from Substitutions

Bargaining Power of Suppliers

• Virgin Atlantic, • Qantas Airways

• Economic & Demographic Changes

• Higher Disposable Income

• Increasing no of working women

• Increasing awareness

• Exposure to global brands

• Other modes of Transportation

• HPCL/ BPCL – Fuel

• Airport Authority

• Jet Airways • Indian Airlines • Go airways

Fall Of The King ‘King se Kangaal’

Start of the crisis

• Ever since the airline commenced operations in 2005, it has been reporting losses.

• In 2008, more losses due to economic downturn.

• After acquiring Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years.

• By early 2012, the airline accumulated losses of over Rs 7,000 crore

Contd….

• By Feb 2012, Kingfisher has been declared NPA by following banks

– SBI

– Bank of Baroda

– PNB

– IDBI

– Central bank

– BOI

– Corporation Bank

• Loss> US$1.50 billion

The 6 Reasons of downfall:

No Network Planning- “A me too approach” kingfisher tried to copy the network of arch rivals “Jet Airways”. Shifting its international operations base from Bangalore where it was the sole Indian carrier offering wide body services to Mumbai – the home base of both Jet Airways and Air India.

Economic downturn

Sky rocketing of Aircraft Fuel Price.

Inability to hike fare due to competition

He had diversified his business in various field but he has not coined any CEO.

He was unable to read the mind of Indian customer(KFA was not for common man).

Total Dues

Delayed salary

Staff strength of 6,000

60% of its employees and that by 31st Jan 12

Fuel Dues

Hindustan Petroleum Corporation Limited (HPCL) stopped the fuel for 2 hours

Bharat Petroleum Corporation in 2009 had filed a case for dues over Rs245 crore

Aircraft lease rental dues

Returned the A320 aircraft to GECAS due to non payment of dues.

In Jul 2010, DVB Aviation Finance Asia Ltd (a lessor from Singapore), sued Kingfisher Airlines for lease rental default

Erosion of net worth

In Sep 2011, the Chairman & Managing Director of Kingfisher Airlines said “The Company has incurred substantial losses and its net worth has been eroded”

Identification of Problem

MANAGING THE TRANSITION: KEEPING ALL STAKEHOLDERS ENGAGED

Cut-throat fares, high fuel prices, and high taxes..

Air India was responsible for the cut-throat fares that started the price

competition which forced all the airlines to lower prices.

The domestic airlines are projected to report a combined loss of $2.5 billion

(1,250 crore) by end of this fiscal (2011-12).

Strike Problem.

Cancellation of flights.

Lack of Management.

Dissatisfaction of Loyal costumer.

Increasing Loss Day by Day (Rs. 470 Crore 2011)

Suggestions

• Remove the flights form low frequency routes

• Try to bring down the cost per flight if an airport service more number of flights

• Improve revenue per passenger

• Avoid aggressive expansion of fleets

• Avoid full course meal, give snacks

• Try to focus on smaller aircraft (50-70 seaters) and fuel efficient planes for short distance

• For a long term strategy, internationally focus should remain on one region at a time

Suggestions

• Meet the expectations of its customers so that they continued to patronize its products and services and also encourage others to do the same.

• Keep it worthwhile for the suppliers of the necessary Resources to continue to do business with the organization.

• Meet the aspiration of its employees so that they were motivated to contribute to the organization and also help attract and retain the necessary talent for future growth. And

• Comply with expectation of the society/community both in terms of legal compliance as well as a good corporate citizen.

Dimple Salian: 36 Jaswinder Singh: 3 Kemrad Lakdawala: 17 Rahul Shinde: 44 Rajesh Pisat: 31 Tushar Pingulkar: 30

Group discussion on KFA

Documents

kingfisher targets

kingfisher holidays

kingfisher airlines

world of service

flybuysms service

exquisite service

service procedures

service marketing mix