Value proposition for kingfisher airlinesPresentation Transcript
INTRODUCTION TO THE CASESTUDY The Indian aviation industry is one of the fastestgrowing industry in the world. Private airlines account for 80% of the sector ofdomestic aviation market. Indian aviation sector is poised to become one of thetop five civil aviation markets in the world over nextfive years. India ranks ninth in the global civil aviation market.
ABOUT THE TREND The aviation industry is growing at an annual growthrate of 18%. The average load factor for all domestic airlines stood75% for the period starting from Jan 2010 to Aug 2010. The combined market share of independent LCC’s isover 35% while full service carriers now deploy almost 70-80% of their domestic capacity under LCC brands such asJET KONNECT and KINGFISHER RED.
BACKGROUND OF KINGFISHER AIRLINES Kingfisher Airlines commenced operations as on 9thMay 2005. Kingfisher offers over 350 flights daily, connecting 68key Indian and International destinations. KINGFISHER AL IS ONE OF THE SIX AIRLINES IN THEWORLD TO HAVE A FIVE STAR RATING FROM SKYTRAXAND THE ONLY AIRLINE IN INDIA THAT HAS IT. Kingfisher Airlines operates three classes of service i.e.FIRST, CLASS AND RED. First and class flights- Kingfisher Airlines offers worldclass in flight entertainment, extra wide seats, spaciousleg room and large overhead storage space,internationalclass cabin crew, well appointed interiors on board andlemonade and three course gourmet cuisine.
RED- Kingfisher airlines is first airlines to provide in-flight entertainment in domestic flights. Bottled drinkingwater and cineblitz magazine.Kingfisher RED has redefined low fare flying in India . Onboard kingfisher red guests get complimentary hot andfilling food. Guests can earn miles (KING CLUB-LOYALTY PROGRAMME) as they fly and these miles canbe redeemed for free tickets. Kingfisher airlines have an extensive on groundexperience program for communicating five starexperience and they also provide valet service. .
THREE CHEERS FOR KINGFISHERAIRLINES.. HIP HIP HURRAY!!!!! ST 21 NOV 2005 Kingfisher Airlines orders 30 new Airbus A320 family jets worthUS$1.9 Billion. ( DURING THE START OF AIRLINES) MAY 2009Kingfisher airlines acquired 1st highest market share within fewyears of its commencement. 19TH DEC 2007Kingfisher airlines merged with Air Deccan and launched a LOWCOST CARRIER as KINGFISHER RED which provided meals andbottled drinking water to all its passengers, the only LCC doingthat. Kingfisher airlines became the passenger favorite airline as itbecame known for its EXPERIENCE FLYING.Success story of Kingfisher airlines….. Read foryourself.. …
Id like to be adopted please. (DECEMBER 2008)I had a choice of airline from London to Bangalore - BA or Kingfisher - flighttimes were better on BA, but the thought of a few more inches of legroom withKingfisher were just calling me loudly. So Kingfisher it was.Flight booked. So, I was very happy. Hurray. No more fighting for a seat, anoverpriced drink, and then joining a queue to sit in (admittedly 34 inches) of seatpitch (comfort) cattle class for 10 hours.It was an amazing experience. From the greeting as you get on the plane , theacres and acres of space, three windows in my "suite", thats right I had threewindows! An amazing toiletry pack, with a wooden handbag sizedhairbrush, smellies from Salvatore Ferragamo, a sleepsuit, slippers, papers, magazines, hot towels, man alive where am I going to putall this stuff? Then Vijay, or do you want me to start calling you Popsalready?, appears on the screen - the 17inch screen and tells me that hespersonally selected all the crew on board, and hes told them to treat me as if Iwere a guest in his home. Dr Mallya, after the Kingfisher First experience, Im notsure just visiting is going to be enough for me. As my subject says, I think Id liketo be adopted.
With the onboard camera, that appears to be attached to the underside of theplane, so I could watch the runway from the bottom of the plane as wetaxied, then watch London as we took off, and then southern England we flewover, then Europe. Clearly Im easily pleased.But seriously, what wowed me the most? - theres no one thing, but there wereplenty of them - it started with the offer of champagne.-Dom Perignon no less, and yes I would like to drink my champagne in the bar -and yes I sat on the funky cream leather sofa watching Europe scoot past as Ilived the high life and ordered my dinner. After retiring to my suite, dinner wasserved. Oh boy a fabulous vegetable thali - served on a beaten silver platter.(wow, amazing food and superb presentation).My fully flat bed was obviously prepared for me - and then the stars came out.Literally, the ceiling goes a midnight blue colour and stars appear, so Im notonly in heaven, I can see it as well.Waking to breakfast and coffee served from silver jugs , there was just enoughtime to move my chair into every position possible, test out the massageoptions on it, it was amazing and then we were in Bangalore. And of course Ilove being first off the plane, and seeing my bag the second one out Kingfisher -you did me proud, it was an amazing experience, I fear youve spoiled me for
life.Im sorry I ever doubted you - for me it was great, your support staff werefabulous, explained everything in great detail, your emails were timely,informative. And of course, the last word must go to Dr Mallya. Sir, you havedone a grand job. And should you ever feel the need to adopt me, then mymother would understand.Ms. Sarah Carter.
BUT THE BILLIONAIREMR MALLYA WASN’T THAT LUCKY… A MAN CARRYINGLARGER THAN LIFE IMAGE TASTED LIFE IN REAL SENSE..!!!!!!
NOTHING IS PERMANENT, IF HANDLED Sometimes destiny hits you hardUNREALISTICALLY!!!! on the head and the going gets “Will soonVijay mallya said, tough. Vijay Mallya’s philosophy of largerstop the operations than life image has left him inof Kingfisher Red as blunder.he did not believe in A total debt of around Rs 5500 crore has forced him to sendlow cost operations KINGFISHER RED to a deathany longer.” sentence. ?????..
TUMBLING MARKET SHARE 2007- Mid 2011 Current1) KINGFISHER 1) JET AIRWAYS AIRLINES 2) AIR INDIA2) JET AIRWAYS 3) INDIGO3) AIR INDIA 4) SPICE JET4) INDIGO 5) KINGFISHER5) SPICE JET AIRLINES6) GO AIR 6) GO AIR
CONTINUOUS LOSSES TOOK A TOLL ON QUALITY OF THE AIRLINE.Some of the customer reviews:1) Hong Kong to Delhi. Check-in staff were rude and ignorant, we were left at the service desks for almost 30 mins unattended. The in-flight entertainment did not work for the middle of the cabin. The toilets were not kept clean. We were travelling with a 10 month infant and there was no bassinet or seatbelt provided. Seats were uncomfortable and 5 out of the 6 seats we booked had some type of fault in it (cup holder broken, remote broken etc).2) First Class from Delhi to London. At Delhi airport the lounge was a building site with drilling, hammering and intolerable noise. Staff were wiping dust from bottles. We asked to use a different lounge, the staff ran around for about half an hour, to no avail, whilst we waited at the entrance. Onboard the
advertised champagne had not been loaded, "catering issues",food was canteen style, the cabin was shabby with bare patcheson the upholstery and dirty. The entertainment system on 2 of theseats did not work so I moved 3 times. Not 1st class in any shapeor form.All in all we made a bad choice flying this airline.4) Kingfisher airlines just hype.5) Flying kingfisher domestically was a single star experienceand not five star as advertised.6) Not the king of good times.
THE PROBLEM TURNS OUT TO BE WORST. .. …!!!!HINDUSTAN TIMES,2012 February 23rdKingfisher airlines continues to cancel flights for the fifthconsecutive day. 30 bank accounts freezed by service taxdept, 40 pilots resign kingfisher airlines.The staff salary outstanding from past 3 months.I dont think its an option to just give up andexit and close down. I dont think it will happen.I dont think the government wants it either,"Mr Mallya said, in his first public reaction to thelatest crisis that has gripped his cash-strappedairline.
ACTUAL SOLUTIONVISION: The KFA family will continually deliver a safe, valuebased and enjoyable travel experience to all its guests.MISSION: To make kingfisher airlines the best in the world. SWOT ANALYSIS OF KINGFISHER AIRLINESS- Only LCC providing meals onboard.W- 1) High debt. 2) Diluting reputation and fear of closure.O- Middle class segment opting for flights. T- 1) Hiking fuel price. 2) Competition. 3) Bullet train to be introduced. 4) Taxation policy of government.
POSITIONING 1)Five star experience of flyingSEGMENTATION 1) For FIRST AND CLASS- Combination of demographic and psychographic 2) For RED – Cost conscious passengersTARGET CLASS1) For FIRST AND CLASS – Affluent class people2) For RED- Middle Class people
CURRENT VALUE PROPOSITION OF KINGFISHER AIRLINES1) Various in-flight entertainment options, KA is the only airlines providing in-flight entertainment in domestic flights.2) Designer aircrafts giving extra legroom3) Pampering the passengers with quality service and extra helpful staff and cabin crew.4) The LCC cost lower than the economy section cost of other competitor airlines.
5) On ground valet service for baggage handling and assistance.6) Various entertainment options on airport itself.7) Loyal passengers, FLYERS CLUB, whose points can be redeemed for free air tickets.
SUGGESTED VALUE PROPOSITION FOR KINGFISHER AIRLINES BACKGROUND:Currently as Kingfisher airlines is passing through heavyfinancial crisis which has resultantly taken a toll on itsquality and which has indirectly resulted in lesspassengers opting for it, this is the best time for Jetairways as it has hit back and acquired the maximummarket share which it had lost to Kingfisher airlines dueto traditional ways of providing service. TO REGAIN ITS FORMER POSITION KINGFISHER AIRLINES CAN TAKE FOLLOWING STEPS:
1) Repositioning: The current Kingfisher airlines positioning strategy is FIVE STAR EXPERIENCE OF FLYING. This strategy is not working anymore as due to Kingfisher’s quality decline the customers believe that the strategy is just a hype. Kingfisher airlines should reposition while keeping in mind, customer believe what they experience.2) Hard core advertising: Kingfisher airlines should advertise hard through mass media and showcase an attitude of “ THIS TIME WITH THE ORIGINAL KINGFISHER QUALITY AND STYLE…” Advertise in multiplexes, National and international magazines . The advertisement should be made in such a way that will touch the emotional chords of
the lost passengers. This will definitely help in regaining lost passengers and market share. ( The same strategy that was adopted by Cadbury when its pune unit was closed due to positive report on insect found in chocolate.)3) Provide snacks instead of meal in domestic airlines.4) Provide bottled drinking water instead of lemonade in FIRST and CLASS sections of Kingfisher airlines.5) Provide compulsory valet service to senior citizens, passenger with patients or patients(itself) and handicaps only. Withdraw valet service to young and middle aged passengers and if any passenger wants it, charge for it.6) Provide FAMILY OFFERS on fares during the vacation times that is during Diwali , Christmas and new year. This will attract more and more passengers with family and will increase the load factor of the airlines during vacation time.
7) Provide Comic books and General knowledge books to kids. Provide kingfisher scholarship via lucky draw to kids of the families travelling through KA8) Provide recipe and beauty tips books to female passengers in LCC.9) Provide a detailed map of the country where the plane is heading.10) Celebrate passenger birthday, anniversary on board by presenting them a surprise gift.11) Withdraw providing CINEBLITZ magazine in domestic flights of less than 1 hr, instead provide newspapers.
THE VALUE PROPOSITION SUGGESTED FOCUSES ON CUTTING COSTSALONG WITH KEEPING THE PREMIUM IMAGE OF THE AIRLINES INTACT.FOLLOWING THE SUGGESTED VALUE PROPOSITION MAYHELP THE KFA AIRLINES IN ACQUIRING THEIR FORMERFIRST POSITION.