Group discussion on KFA


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Kingfisher Airlines - Product & Services understanding.

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Group discussion on KFA

  1. 1. 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 Indias domestic air travel market. • Passenger growth increased 61.1% year-on-year in Mar-2009
  2. 2. Vision “The Kingfisher Airlines family will consistently deliver a safe,value-based and enjoyable travel experience to all our guests.”
  3. 3. Values  Safety  Services  Happiness  Teamwork  Accountability
  4. 4. 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.
  5. 5. Achievements• Kingfisher Red, Kingfisher Airlines low-cost class on domestic routes.• Kingfisher Airlines has received three global awards at the Skytrax World Airline Awards 2010• Brand Leadership Award.• Indias only 5 Star airline, rated by Skytrax and 6th airline in the world
  6. 6. Extensive Network Providing theWidest Domestic Reach• Before Downfall:
  7. 7. 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, theyll 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.
  8. 8. Service Marketing Mix – 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.
  9. 9. Service Marketing Mix • Price: Quality • 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 Prices people who are ready to pay for luxury. • Initially Kingfisher airlines did not differentiateVariety Services between business class and economy class. But eventually they decreased the prices of business class and called those seats as premium seats.• 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
  10. 10. Pricing StrategyNo. of Bookings Load Factors Date of Travel Festive Seasons Class of Travel Day of Travel Pricing Strategy Business Class/ Weekdays Economy Class
  11. 11. Differentiated Strategy Offers
  12. 12. Service Marketing Mix• 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
  13. 13. Service Marketing Mix• 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.
  14. 14. Service Marketing Mix• PHYSICAL EVIDENCE:
  15. 15. Service Marketing Mix• PHYSICAL EVIDENCE: Comfort Physical Evidence Interior Billing System Designing
  16. 16. Service Marketing Mix• 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.
  17. 17. Service Marketing Mix• 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.
  18. 18. Service Marketing Mix• 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..
  19. 19. Service Marketing Mix• 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.
  20. 20. Service Marketing Mix• 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.
  21. 21. Powerful Marketing Efforts Drive theKingfisher Brand Strength
  22. 22. Significant Marketing Synergiesfrom Parent Group Branding• Leveraging Group Marketing Assets
  23. 23. Partnerships & Frequent FlyerProgram
  24. 24. SWOT Analysis  Strong brand value and reputation in  High maintenance cost at ground and the minds of the consumer. WeaknessStrength airline.  UB group as the parent company.  High ticket pricing (KF First & Class).  Quality service and innovation.  Tough competition from Indian as well  More than 80 destinations. as international players.  Less than 100 people (employees) per  Heavy Debt. aircraft.  If able to survive for a couple of years,  Rising Fuel Costs.Opportunities then can have a big market share.  Rising Labour Costs.  Other low cost airlines providing  Expanding tourism business. Threat better services.  Reputation of providing the best Quality & Services in Indian skies.  Government initiatives in railways  Growth in air travel, with businesses with fast running trains like Duronto. and markets doing better.  Economic slowdown.
  25. 25. Porters Five Force Model Threat from • Virgin Atlantic, New • Qantas Airways Entrants • Economic & • Jet Airways Demographic • Indian Airlines Changes • Go airways • Higher Disposable• HPCL/ BPCL – Bargaining Bargaining Income Fuel Threat from Power of Power of • Increasing no of Competition• Airport Authority Suppliers Customers working women • Increasing awareness • Exposure to global brands Threat from • Other modes of Substitutions Transportation
  26. 26. Fall Of The King‘King se Kangaal’
  27. 27. 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
  28. 28. 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
  29. 29. 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).
  30. 30. Total DuesDelayed salary Fuel DuesStaff strength of 6,00060% of its employees Aircraft lease rental duesand that by 31st Jan 12 Hindustan Petroleum Corporation Limited Erosion of net (HPCL) stopped the fuel Returned the A320 worth for 2 hours aircraft to GECAS due to Bharat Petroleum non payment of dues. In Sep 2011, the Corporation in 2009 had In Jul 2010, DVB Chairman & Managing filed a case for dues Aviation Finance Asia Director of Kingfisher over Rs245 crore Ltd (a lessor from Airlines said “The Singapore), sued Company has incurred Kingfisher Airlines for substantial losses and lease rental default its net worth has been eroded”
  31. 31. 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)
  32. 32. 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
  33. 33. 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.
  34. 34.  Dimple Salian: 36 Jaswinder Singh: 3 Kemrad Lakdawala: 17 Rahul Shinde: 44 Rajesh Pisat: 31 Tushar Pingulkar: 30