o Kingfisher Airlines ……….The king of good times BY: ANKIT KUMAR PGDM-I Semester
BACKGROUND Government of India nationalized 9 Airline Companies in 1953 According to Act IAC and AI have a Monopoly 1994-IAC renamed IA 1995-Six private airlines accounted for 10% of market share 2003-Air Deccan Started its Domestic air travel operations.
BACKGROUND(Contd.) Various Promotional schemes used by Air Deccan. 2005-Number of Domestic Passengers increased. So right time to launch KFA
Started its Operations in India on May 9,2005
In December 2005 KFA had 9 aircrafts having a 6% Market Share
In 2006 Market share increased to 7.6%
Various Awards-Best new Airline Award, Service Excellence for a new Airline
Competition grew up because of Low Cost Carrier.
INTRODUCTION(Contd.) Acquisition of Air Sahara by Jet Airways High Aviation turbine Fuel KFA planning to launch ‘Kingfisher Express’ as Low Cost Carrier Airlines.
PESTEL ANALYSIS POLITICAL FACTORS 1) Open sky policy 2) FDI limits: 100% for Greenfield airports 74% for the existing airports 100% through special permission 49% for airlines. ECONOMICAL FACTORS 1) Contribution to the Indian economy. 2) Rising cost of fuel. 3) Investment in the sector of aviation. 4) The growth of the middle income group family affects the aviation sector
PESTEL ANALYSIS SOCIAL FACTORS 1) Development of cities leads to better services and airports. 2)Employment opportunities. 3)Safety regulations. 4) The status symbol attached to a plane travel. TECHNOLOGICAL FACTORS 1) The growth of e-ticketing. 2) Satellite based navigation system. 3) Modernisation and privatisation of the airports. 4) Developing green field airports with private sector for example in Bangalore the airport corporation limited.
PESTEL ANALYSIS ENVIRONMENTAL FACTORS 1)The increase in the global warming. 2)The sudden and unexpected behavior of the atmosphere and the dependency on whether. 3)Shortage of the infrastructural capacity 4)Tourism saturation. LEGAL FACTORS 1) FDI limits 2) Bilateral treaties 3) Airlines acquisitions and the leasing cost.
Currently the kingfisher airline operates the aircrafts like the airbus A 320, A 319-100 and ATC-72.
After acquiring the Deccan kingfisher has started a new fleet known as Kingfisher Red.
The 7Ps ….
The 7Ps …. PLACE
Covers even the toughest terrains in the country, and the services ranges from Ahmadabad to Agartala and to the major cities such as Delhi, Bangalore, and Chennai etc.
The main strategy that kingfisher follows is to target the metro cities or the tier 1 cities in India.
There are many events and advertisements through which kingfisher airlines is promoted.
There are multiple touch points and finer promotional services working for the promotional activities.
Loyalty and frequent flyer programs are also carried out.
The 7Ps …. 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 majorly for the youth and the high lifestyle segments.
Socio economic class mainly in the age group of 25-45 years are the main segments for which there is a specific prices offered by kingfisher.
Some of the services offered by kingfisher do emphasis on their policy to target those segments which are willing to pay for luxury.
The 7Ps …. PEOPLE The selection, training and motivation of employees can make a huge difference in customer satisfaction. Employees at KFA exhibit competence, a caring attitude, responsiveness, initiative, problem-solving ability and good will. PHYSICAL EVIDENCE Companies demonstrate their service quality through physical evidence and presentation. Apolstery (seat covers, curtains, carpet, tray cover, uniform of the air hostesses etc.), catering tie-ups with 5stars, in-flight entertainment
PROCESS CUSTOMER SALES UNIT AGENTS AIRLINE INTERNET AIRPORT BAGGAGE SCANNING RESERVATION CHECK-IN BAGGAGE SECURITY BOARDING/ EMBARKATION FLYING/ TRANSPORTATION DISEMBARKATION AT DESTINATION BAGGAGE DELIVERY EXIT
S.W.O.T. ANALYSIS STRENGTHS
Strong brand value and reputation in the minds of customers.
Quality of the service.
First airline to have a new fleet of airbuses.
Quality and continuous innovation.
Still a not in profit organization.
High ticket pricing.
Facing a tough competition from competitors.
S.W.O.T. ANALYSIS OPPORTUNITIES
The expanding tourism industry.
The non penetrated domestic market.
Untapped air cargo market.
Fuel price hike.
Promotions and sponsorship declining.
Commissions Gave 10 % commissions to agents Gave incentives to agents. Agents who got KFA a business of more than Rs 1 million a month had a chance to win luxury cars through lucky draws.
Support Services Launch of ‘King Mobile’, an sms service to keep guests updated about flight schedules and status of departure. Pick up services from hotel to airport. Porters at the airport to help with luggage. In-flight services (news and entertainment television).
Will the Good times last?
Targeting the growing middle class segment that was net savvy, young and upwardly mobile, with a propensity to spend.
Maintaining a good passenger load factor
Launch of Kingfisher First
Expanding tourism industry
Contd.. Greater Disposable income Strong Brand value and reputation in the minds of customer. The non penetrated Domestic Market Critical factor will be ability to keep costs low & the offer of an on time service at an affordable price.
Summary KFA was the first Indian carrier to place an order for A380s. KFA offered a facility for home delivery of tickets on demand Multiple fare options and auctioning of tickets on all traffic routes Frequent flyer rewards, benefits & recognition Alliance with Dish TV to bring live TV in Flight 26% stake in Deccan Aviation Quality & Continuous innovation
Reduce the labor cost Simplify the flight operations Offer more transparent pricing Get smart on fuel The process of acquiring spice jet if complete would make kingfisher the largest player in the aviation industry Different modes of pricing should be taken care of.