SlideShare a Scribd company logo
1 of 22
KINGFISHER AIRLINES
MANAGING MULTIPLE STAKEHOLDERS
INTRODUCTION : AIRLINES
INDUSTRY IN INDIA
Domestic airlines industry had grown over five times in terms of
passenger volumes since 1990s
In 1997-98 , Indian domestic passengers were 115 lakhs
In 2011 the passenger volume increased to 606.63 lakhs indicating
a year on year growth of 16.6%
In fin audit report conducted by DGCA in Dec 2011, it was
revealed that Financial problems plagued all the airlines except
unlisted Indigo airlines.
Losses suffered by Jet Airways 714 crores, Spice jet 240 crores,
kingfisher 469 crores($1=Rs 47 in 2011 ) , Air india $1.75 to 200.
Combined los $2.5 Billion (1250 crores)
Reason could be global downturn as well as rise in fuel prices,
very high capital investments, very few new entrants trying their
luck. Easy for new Airlines to enter, but difficult to exit and more
difficult to make profits
CHALLENGES FACED BY
AIRLINES INDUSTRY IN INDIA
Govt regulations for airlines to fly on financially
unattractive routes
Poor state of industry due to cut throat
competition, high fuel prices and high taxes
Repeated bail out for Air india made it a challenge
for private sector airlines to achieve commercial
viability in a competitive market
Cost of domestic airport infra structure born by
airlines
INTRODUCTION: KINGFISHER AIRLINES
Chairman – Vijay Mallya
Chief Executive officer- Sanjay Aggarwal
Established in 2003
Head office – Mumbai
Registered office – Bengaluru
Owned by United Breweries Group
Started full service in 2005 with a fleet of four new Airbus A-320-200
operating from Mumbai to Delhi
In 2007 Acquired 26% stake In Air Deccan and later increased to 50 %
and org merged, renamed as Kingfisher red as low cost arm of
kingfisher airlines
2008 KF commenced international operations connecting Bengaluru
with London.
2011 KF airlines served 63 domestic destinations aand 8
international destinations in 8 countries across Asia and Europe.
Became India's best Airlines won many awards
• Offered three classes of travel on domestic route
and two classes of service on international routes.
• King fisher first- Premium class
• Kingfisher class- standard class
• Kingfisher red - the no frill class
• Rapid expansion and excellent service offerings to
its customers it Started facing challenges in making
profits
• It never made profits since it started operations in
2005
• There was no sign that the airline was moving in the
direction of financial viability
• By Sep 2011 the accumulated losses were 5960
crores. Its debt of about 8000 crores from about 13
different lenders who refused to lend in Nov 2011.
Some analyst believe that the decision to merge kingfisher and Air
Deccan was a mistake. Kingfisher airlines and kingfisher red offered
similar services without leveraging the benefits of full service or low
costs.
In Nov 2011, KF cancelled 35 flights.
DGCA sought explanation from Kingfisher management
Nov 15, 2011 Vijay Mallya chairman and Sanjay Agarwal CEO addressed
a press conference
Clarified that the cancellation were the result of a well planned
initiatives and part of a long term restructuring process. However it
could not convince customers, even employees , crew, pilots were
taken into surprise.
STAKE HOLDERS - CUSTOMERS
• Best services ( food, entertainment etc.)
• King club
• Lounges at airports.
• Very loyal customers.
• Flight cancellations and other cost cutting led to
discontent
• The question was whether the company was willing to
risk its only set of satisfied stakeholders.
SUPPLIERS
• Many suppliers without whom the company would sink.
• SBI was the leader of the consortium of 13 banks that did not
provide further financial support at the end of 2011.
• The story with the suppliers of aircraft was no different. (GE
commercial aviation services )
• Fuel suppliers started dealing on cash basis due to delayed
payments.
• AAI – Pending dues of 200cr.(CHEQUES BOUNCED)
• What could Kingfisher do to improve its relationship with its
suppliers? Could it afford to displease them any longer?
EMPLOYEES
• Kingfisher Airline had staff strength of 6,000 in 2011.
• Delayed salaries every month since July 2011.
• The DGCA report suggested that 24 pilots had left the airline in
NOV – DEC 2011.
• Employees had to face irate customers due to the
cancellations.
• What could Kingfisher Airlines do to improve the morale of is
employees?
• Would its actions influence the kind of talent it would attract
and impact the quality of service it could offer in the future?
SOCIETY
• Several agencies of the government were unhappy with
Kingfisher Airlines.
• Kingfisher Airlines had asked the government to help it
survive by ensuring three-months of credit period from its
suppliers.
• Government tried to put pressure on the public banks but
the All India Bank Employees Association demonstrated to
oppose any bailout of the airline.
• The DGCA was quite damning of the airline. It even
indicated that withdrawing Kingfisher’s license to fly was
an option.
• The service tax department had frozen the bank account
of Kingfisher for non-payment of dues.
• What could Kingfisher do to win back the support of the
larger society and the government and its agencies so that
they would provide the flexibility and support needed by
the airline to recover?
OWNERS
• Kingfisher shares that had traded at about 48 per share
in April 2011 traded close to 20 per share in November
2011
• The shares of Kingfisher’s holding company, UB
Group, that traded at about 315 per share earlier in the
year was down to 82 per share.
• What could the management of Kingfisher do to restore
the confidence of its shareholders?
• Could it afford to keep shareholder concerns on the
back burner for some time and let share prices fall
further while it addressed the concerns of the other
stakeholders?
PORTER’S 6
FORCES
THREATS FROM COMPETITORS:
Poor state of the industry can be attributed to another three
factors:
-cut-throat fares
-high fuel prices
-high taxes.
Cut-throat fares that started the price competition which
forced all the airlines to lower prices.
Contributed to growth in passenger volumes, but had hurt the
finances of all the airlines.
The repeated government bailouts for Air India made it a
challenge for private sector airlines.
THREATS FROM NEW ENTRANTS:
Threat from new entrants is medium to low.
People may have a relative high preference on major
brand base on safety and convenience concerns
Capital requirements are high.
The major players in the Indian aviation industry form
an obstacle to foreign airlines.
Indian flyers prefer to have an Indian experience on
the flight.
THREATS OF SUBSTITUTES:
• Introduction of high speed trains, high tech buses and
other means of transport.
• There is no switching cost.
• People can take other transportations other than
airplane if they travel domestically, or their business is
not in a rush, it may spend longer time but less money.
BARGAINING POWER OF
SUPPLIERS:
• Two main suppliers in airline industry are
-fuel suppliers and
-aircraft suppliers.
• They have high bargaining power, since there is
limited number of suppliers; companies have to use
fuel and there is no substitute currently.
• Also, companies will choose a trustworthy supplier,
which means the scope of suppliers will be narrowed
down to fewer choices
BARGAINING POWER OF
CUSTOMERS:
• The bargaining power of the customers is low since
kingfisher is designed to meet the total comfort and value
for money.
• Kingfisher Airlines was credited with transforming service
levels.
• Its lounge facilities at various airports established new
standards in services not seen in India before. It had
managed to create a very loyal customer base that would
support it.
GOVERNMENT POLICIES:
• Owing to government regulations, there was a need for
airlines to fly on financially unattractive routes.
• Airlines were forced to incur some losses they could
otherwise have avoided if they were run on purely
commercial grounds.
• Government restrictions on the petroleum industry, the
airlines needed to buy aviation turbine fuel at very high
prices.
LEARNINGS
Service businesses should not operate in such a
touch and go manner.
They where extremely confident of their to find
fixes on the fly.
Temporary JUGAAD
Its better to take a ego hit in time rather than to run
the business bleeding.
Should have steadily phased down to few dozens
of services
LEARNINGS
Aircraft inflight entertainment system was the USP
at one time, but it added to a huge cost which was
NOT affordable.
Full service flights should have cut down to only
affordable routes.
Not to loose focus.. Stick on one thing, do it right
and then move to another
They tried many things all at once which they
couldn't cope with financially
FOCUS ON SINGLE SET
OF STAKEHOLDERS
The company focused only on the costumers and
kept neglecting other 4 stakeholders, which
eventually led to bankruptcy.

More Related Content

What's hot

Analysis of kingfisher airlines
Analysis of kingfisher airlinesAnalysis of kingfisher airlines
Analysis of kingfisher airlinesdspatra
 
Kingfisher airlines ppt
Kingfisher airlines pptKingfisher airlines ppt
Kingfisher airlines pptGaurav Patel
 
Kingfisher Airlines Failure
Kingfisher Airlines FailureKingfisher Airlines Failure
Kingfisher Airlines FailureRohan Telang
 
Analysis of Financial Statements of Kingfisher
Analysis of Financial Statements of KingfisherAnalysis of Financial Statements of Kingfisher
Analysis of Financial Statements of KingfisherDivya Tibrewal
 
Problems faced by Jet airways
Problems faced by Jet airways Problems faced by Jet airways
Problems faced by Jet airways AayushiTaparia
 
Kingfisher Airlines- A Case Study
Kingfisher Airlines- A Case StudyKingfisher Airlines- A Case Study
Kingfisher Airlines- A Case StudyChaahat Khattar
 
Kingfisher Airlines
Kingfisher AirlinesKingfisher Airlines
Kingfisher AirlinesAnkit Rohila
 
Pakistan's Airline Industry Analysis
Pakistan's Airline Industry Analysis Pakistan's Airline Industry Analysis
Pakistan's Airline Industry Analysis IRFAN UR REHMAN
 
Rise and Fall of Kingfisher Airlines
Rise and Fall of Kingfisher AirlinesRise and Fall of Kingfisher Airlines
Rise and Fall of Kingfisher AirlinesShree Harsha
 
Success story of indigo
Success story of indigoSuccess story of indigo
Success story of indigoNandita Kumari
 
Marketing mix of airlines industry
Marketing mix of airlines industryMarketing mix of airlines industry
Marketing mix of airlines industryCareer Risers
 
Kingfisher deccan deal
Kingfisher deccan dealKingfisher deccan deal
Kingfisher deccan dealsaiwagh2001
 
Jet Airways case study
Jet Airways case studyJet Airways case study
Jet Airways case studyRUPANJAN NAYAK
 
Emirates Strategy Analysis
Emirates Strategy AnalysisEmirates Strategy Analysis
Emirates Strategy AnalysisTina Sepehrifar
 
Success Factors of Southwest Airlines
Success Factors of Southwest AirlinesSuccess Factors of Southwest Airlines
Success Factors of Southwest AirlinesRohan Bharaj
 
Emirates Strategic Management Analysis
Emirates Strategic Management AnalysisEmirates Strategic Management Analysis
Emirates Strategic Management AnalysisQelender Memmedli
 

What's hot (20)

Analysis of kingfisher airlines
Analysis of kingfisher airlinesAnalysis of kingfisher airlines
Analysis of kingfisher airlines
 
Kingfisher airlines ppt
Kingfisher airlines pptKingfisher airlines ppt
Kingfisher airlines ppt
 
Singapore Airlines
Singapore AirlinesSingapore Airlines
Singapore Airlines
 
Airline industry 7 ps
Airline industry 7 psAirline industry 7 ps
Airline industry 7 ps
 
Kingfisher Airlines Failure
Kingfisher Airlines FailureKingfisher Airlines Failure
Kingfisher Airlines Failure
 
Analysis of Financial Statements of Kingfisher
Analysis of Financial Statements of KingfisherAnalysis of Financial Statements of Kingfisher
Analysis of Financial Statements of Kingfisher
 
Problems faced by Jet airways
Problems faced by Jet airways Problems faced by Jet airways
Problems faced by Jet airways
 
Kingfisher Airlines- A Case Study
Kingfisher Airlines- A Case StudyKingfisher Airlines- A Case Study
Kingfisher Airlines- A Case Study
 
Kingfisher Airlines
Kingfisher AirlinesKingfisher Airlines
Kingfisher Airlines
 
Pakistan's Airline Industry Analysis
Pakistan's Airline Industry Analysis Pakistan's Airline Industry Analysis
Pakistan's Airline Industry Analysis
 
JET AIRWAYS
JET AIRWAYSJET AIRWAYS
JET AIRWAYS
 
Rise and Fall of Kingfisher Airlines
Rise and Fall of Kingfisher AirlinesRise and Fall of Kingfisher Airlines
Rise and Fall of Kingfisher Airlines
 
Jet Airways - Strategy
Jet Airways - StrategyJet Airways - Strategy
Jet Airways - Strategy
 
Success story of indigo
Success story of indigoSuccess story of indigo
Success story of indigo
 
Marketing mix of airlines industry
Marketing mix of airlines industryMarketing mix of airlines industry
Marketing mix of airlines industry
 
Kingfisher deccan deal
Kingfisher deccan dealKingfisher deccan deal
Kingfisher deccan deal
 
Jet Airways case study
Jet Airways case studyJet Airways case study
Jet Airways case study
 
Emirates Strategy Analysis
Emirates Strategy AnalysisEmirates Strategy Analysis
Emirates Strategy Analysis
 
Success Factors of Southwest Airlines
Success Factors of Southwest AirlinesSuccess Factors of Southwest Airlines
Success Factors of Southwest Airlines
 
Emirates Strategic Management Analysis
Emirates Strategic Management AnalysisEmirates Strategic Management Analysis
Emirates Strategic Management Analysis
 

Similar to Kingfisher stakeholders case study

case study on kingfisher
case study on kingfishercase study on kingfisher
case study on kingfisherKunal Meghani
 
Strategic Mistakes That Led To The Failure Of Kingfisher Airlines
Strategic Mistakes That Led To The Failure Of Kingfisher AirlinesStrategic Mistakes That Led To The Failure Of Kingfisher Airlines
Strategic Mistakes That Led To The Failure Of Kingfisher AirlinesSourav Giri
 
Kingfisher airlines financial_crisis
Kingfisher airlines financial_crisisKingfisher airlines financial_crisis
Kingfisher airlines financial_crisissourav Ghorai
 
Frankfinn Aviation Presentation ...
Frankfinn Aviation Presentation ...Frankfinn Aviation Presentation ...
Frankfinn Aviation Presentation ...Syed Shabbir Hussain
 
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdf
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdfIntroduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdf
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdfsaurabhmehramehra
 
STRATEGIC FAILURES-kingfisher airlines
STRATEGIC FAILURES-kingfisher airlinesSTRATEGIC FAILURES-kingfisher airlines
STRATEGIC FAILURES-kingfisher airlinesSudharshanE1
 
Case study on Kingfisher Airlines
Case study on Kingfisher AirlinesCase study on Kingfisher Airlines
Case study on Kingfisher AirlinesMithilesh Trivedi
 
Kingfisher ppt...
Kingfisher ppt...Kingfisher ppt...
Kingfisher ppt...Deepak Jha
 
Kingfisher airlines financial crisis
Kingfisher airlines financial crisisKingfisher airlines financial crisis
Kingfisher airlines financial crisismanish kumar
 
Kingfisher airlines financial crisis
Kingfisher airlines financial crisisKingfisher airlines financial crisis
Kingfisher airlines financial crisismanish kumar
 
Downfall of kingfisher airlines.pptx
Downfall of kingfisher airlines.pptxDownfall of kingfisher airlines.pptx
Downfall of kingfisher airlines.pptxBharatBhushan807205
 
Kingfisher Airlines Case Study
Kingfisher Airlines Case StudyKingfisher Airlines Case Study
Kingfisher Airlines Case StudyPrashantRatnani1
 
case study for king fisher
 case study for king fisher case study for king fisher
case study for king fisherSnehaNeha10
 
kingfisherairlinesppt-120718220956-phpapp01.pdf
kingfisherairlinesppt-120718220956-phpapp01.pdfkingfisherairlinesppt-120718220956-phpapp01.pdf
kingfisherairlinesppt-120718220956-phpapp01.pdfSahil862967
 
Kingfisher Airlines Crisis
Kingfisher Airlines CrisisKingfisher Airlines Crisis
Kingfisher Airlines CrisisRishebh Clement
 
Kingfisher Airliance - Can still remain King of Good Times??
Kingfisher Airliance - Can still remain King of Good Times??Kingfisher Airliance - Can still remain King of Good Times??
Kingfisher Airliance - Can still remain King of Good Times??Vivek Kumar Anand
 

Similar to Kingfisher stakeholders case study (20)

case study on kingfisher
case study on kingfishercase study on kingfisher
case study on kingfisher
 
Strategic Mistakes That Led To The Failure Of Kingfisher Airlines
Strategic Mistakes That Led To The Failure Of Kingfisher AirlinesStrategic Mistakes That Led To The Failure Of Kingfisher Airlines
Strategic Mistakes That Led To The Failure Of Kingfisher Airlines
 
Kingfisher airlines financial_crisis
Kingfisher airlines financial_crisisKingfisher airlines financial_crisis
Kingfisher airlines financial_crisis
 
Frankfinn Aviation Presentation ...
Frankfinn Aviation Presentation ...Frankfinn Aviation Presentation ...
Frankfinn Aviation Presentation ...
 
Air India Crisis PPT
Air India Crisis PPTAir India Crisis PPT
Air India Crisis PPT
 
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdf
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdfIntroduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdf
Introduction Kingfisher Airlines Ltd- was owned by biggest liquor tyco.pdf
 
STRATEGIC FAILURES-kingfisher airlines
STRATEGIC FAILURES-kingfisher airlinesSTRATEGIC FAILURES-kingfisher airlines
STRATEGIC FAILURES-kingfisher airlines
 
Kingfisher Airlines
Kingfisher Airlines Kingfisher Airlines
Kingfisher Airlines
 
Bel kingfisher
Bel kingfisherBel kingfisher
Bel kingfisher
 
Case study on Kingfisher Airlines
Case study on Kingfisher AirlinesCase study on Kingfisher Airlines
Case study on Kingfisher Airlines
 
Kingfisher ppt...
Kingfisher ppt...Kingfisher ppt...
Kingfisher ppt...
 
Kingfisher airlines financial crisis
Kingfisher airlines financial crisisKingfisher airlines financial crisis
Kingfisher airlines financial crisis
 
Kingfisher airlines financial crisis
Kingfisher airlines financial crisisKingfisher airlines financial crisis
Kingfisher airlines financial crisis
 
Downfall of kingfisher airlines.pptx
Downfall of kingfisher airlines.pptxDownfall of kingfisher airlines.pptx
Downfall of kingfisher airlines.pptx
 
Indian Aviation Industry
Indian Aviation IndustryIndian Aviation Industry
Indian Aviation Industry
 
Kingfisher Airlines Case Study
Kingfisher Airlines Case StudyKingfisher Airlines Case Study
Kingfisher Airlines Case Study
 
case study for king fisher
 case study for king fisher case study for king fisher
case study for king fisher
 
kingfisherairlinesppt-120718220956-phpapp01.pdf
kingfisherairlinesppt-120718220956-phpapp01.pdfkingfisherairlinesppt-120718220956-phpapp01.pdf
kingfisherairlinesppt-120718220956-phpapp01.pdf
 
Kingfisher Airlines Crisis
Kingfisher Airlines CrisisKingfisher Airlines Crisis
Kingfisher Airlines Crisis
 
Kingfisher Airliance - Can still remain King of Good Times??
Kingfisher Airliance - Can still remain King of Good Times??Kingfisher Airliance - Can still remain King of Good Times??
Kingfisher Airliance - Can still remain King of Good Times??
 

Recently uploaded

Digital Marketing in 5G Era - Digital Transformation in 5G Age
Digital Marketing in 5G Era - Digital Transformation in 5G AgeDigital Marketing in 5G Era - Digital Transformation in 5G Age
Digital Marketing in 5G Era - Digital Transformation in 5G AgeDigiKarishma
 
What’s the difference between Affiliate Marketing and Brand Partnerships?
What’s the difference between Affiliate Marketing and Brand Partnerships?What’s the difference between Affiliate Marketing and Brand Partnerships?
What’s the difference between Affiliate Marketing and Brand Partnerships?Partnercademy
 
A Comprehensive Guide to Technical SEO | Banyanbrain
A Comprehensive Guide to Technical SEO | BanyanbrainA Comprehensive Guide to Technical SEO | Banyanbrain
A Comprehensive Guide to Technical SEO | BanyanbrainBanyanbrain
 
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content Club
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content ClubSEO Forecasting by Nitin Manchanda at Berlin SEO & Content Club
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content ClubNitin Manchanda
 
5 Digital Marketing Tips | Devherds Software Solutions
5 Digital Marketing Tips | Devherds Software Solutions5 Digital Marketing Tips | Devherds Software Solutions
5 Digital Marketing Tips | Devherds Software SolutionsDevherds Software Solutions
 
The power of SEO-driven market intelligence
The power of SEO-driven market intelligenceThe power of SEO-driven market intelligence
The power of SEO-driven market intelligenceHinde Lamrani
 
Ryanair Marketing and business development Plan
Ryanair Marketing and business development  PlanRyanair Marketing and business development  Plan
Ryanair Marketing and business development Plandrkarimsaber
 
The Evolution of Internet : How consumers use technology and its impact on th...
The Evolution of Internet : How consumers use technology and its impact on th...The Evolution of Internet : How consumers use technology and its impact on th...
The Evolution of Internet : How consumers use technology and its impact on th...sowmyrao14
 
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdf
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdfResearch and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdf
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdfVWO
 
SEO and Digital PR - How to Connect Your Teams to Maximise Success
SEO and Digital PR - How to Connect Your Teams to Maximise SuccessSEO and Digital PR - How to Connect Your Teams to Maximise Success
SEO and Digital PR - How to Connect Your Teams to Maximise SuccessLiv Day
 
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023Marketing BRANDING
 
Gen Z and Millennial Debit Card Use Survey.pdf
Gen Z and Millennial Debit Card Use Survey.pdfGen Z and Millennial Debit Card Use Survey.pdf
Gen Z and Millennial Debit Card Use Survey.pdfMedia Logic
 
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...LazarinaStoyanova
 
From Chance to Choice - Tactical Link Building for International SEO
From Chance to Choice - Tactical Link Building for International SEOFrom Chance to Choice - Tactical Link Building for International SEO
From Chance to Choice - Tactical Link Building for International SEOSzymon Słowik
 
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...Ahrefs
 
Digital Marketing Courses In Pune- school Of Internet Marketing
Digital Marketing Courses In Pune- school Of Internet MarketingDigital Marketing Courses In Pune- school Of Internet Marketing
Digital Marketing Courses In Pune- school Of Internet MarketingShauryaBadaya
 
Understand the Key differences between SMO and SMM
Understand the Key differences between SMO and SMMUnderstand the Key differences between SMO and SMM
Understand the Key differences between SMO and SMMsearchextensionin
 
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...Marketing BRANDING
 
Unlocking Passive Income: The Power of Affiliate Marketing
Unlocking Passive Income: The Power of Affiliate MarketingUnlocking Passive Income: The Power of Affiliate Marketing
Unlocking Passive Income: The Power of Affiliate MarketingDaniel
 
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...Hugues Rey
 

Recently uploaded (20)

Digital Marketing in 5G Era - Digital Transformation in 5G Age
Digital Marketing in 5G Era - Digital Transformation in 5G AgeDigital Marketing in 5G Era - Digital Transformation in 5G Age
Digital Marketing in 5G Era - Digital Transformation in 5G Age
 
What’s the difference between Affiliate Marketing and Brand Partnerships?
What’s the difference between Affiliate Marketing and Brand Partnerships?What’s the difference between Affiliate Marketing and Brand Partnerships?
What’s the difference between Affiliate Marketing and Brand Partnerships?
 
A Comprehensive Guide to Technical SEO | Banyanbrain
A Comprehensive Guide to Technical SEO | BanyanbrainA Comprehensive Guide to Technical SEO | Banyanbrain
A Comprehensive Guide to Technical SEO | Banyanbrain
 
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content Club
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content ClubSEO Forecasting by Nitin Manchanda at Berlin SEO & Content Club
SEO Forecasting by Nitin Manchanda at Berlin SEO & Content Club
 
5 Digital Marketing Tips | Devherds Software Solutions
5 Digital Marketing Tips | Devherds Software Solutions5 Digital Marketing Tips | Devherds Software Solutions
5 Digital Marketing Tips | Devherds Software Solutions
 
The power of SEO-driven market intelligence
The power of SEO-driven market intelligenceThe power of SEO-driven market intelligence
The power of SEO-driven market intelligence
 
Ryanair Marketing and business development Plan
Ryanair Marketing and business development  PlanRyanair Marketing and business development  Plan
Ryanair Marketing and business development Plan
 
The Evolution of Internet : How consumers use technology and its impact on th...
The Evolution of Internet : How consumers use technology and its impact on th...The Evolution of Internet : How consumers use technology and its impact on th...
The Evolution of Internet : How consumers use technology and its impact on th...
 
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdf
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdfResearch and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdf
Research and Discovery Tools for Experimentation - 17 Apr 2024 - v 2.3 (1).pdf
 
SEO and Digital PR - How to Connect Your Teams to Maximise Success
SEO and Digital PR - How to Connect Your Teams to Maximise SuccessSEO and Digital PR - How to Connect Your Teams to Maximise Success
SEO and Digital PR - How to Connect Your Teams to Maximise Success
 
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023
Agencia Marketing Branding Creative Certification Exam Google Diciembre 2023
 
Gen Z and Millennial Debit Card Use Survey.pdf
Gen Z and Millennial Debit Card Use Survey.pdfGen Z and Millennial Debit Card Use Survey.pdf
Gen Z and Millennial Debit Card Use Survey.pdf
 
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...
When to use Machine Learning Models in SEO and Which ones to use - Lazarina S...
 
From Chance to Choice - Tactical Link Building for International SEO
From Chance to Choice - Tactical Link Building for International SEOFrom Chance to Choice - Tactical Link Building for International SEO
From Chance to Choice - Tactical Link Building for International SEO
 
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...
What I learned from auditing over 1,000,000 websites - SERP Conf 2024 Patrick...
 
Digital Marketing Courses In Pune- school Of Internet Marketing
Digital Marketing Courses In Pune- school Of Internet MarketingDigital Marketing Courses In Pune- school Of Internet Marketing
Digital Marketing Courses In Pune- school Of Internet Marketing
 
Understand the Key differences between SMO and SMM
Understand the Key differences between SMO and SMMUnderstand the Key differences between SMO and SMM
Understand the Key differences between SMO and SMM
 
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...
Agencia Marketing Branding Examen Fundamentals Digital Marketing Google Abril...
 
Unlocking Passive Income: The Power of Affiliate Marketing
Unlocking Passive Income: The Power of Affiliate MarketingUnlocking Passive Income: The Power of Affiliate Marketing
Unlocking Passive Income: The Power of Affiliate Marketing
 
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...
(Generative) AI & Marketing: - Out of the Hype - Empowering the Marketing M...
 

Kingfisher stakeholders case study

  • 2. INTRODUCTION : AIRLINES INDUSTRY IN INDIA Domestic airlines industry had grown over five times in terms of passenger volumes since 1990s In 1997-98 , Indian domestic passengers were 115 lakhs In 2011 the passenger volume increased to 606.63 lakhs indicating a year on year growth of 16.6% In fin audit report conducted by DGCA in Dec 2011, it was revealed that Financial problems plagued all the airlines except unlisted Indigo airlines. Losses suffered by Jet Airways 714 crores, Spice jet 240 crores, kingfisher 469 crores($1=Rs 47 in 2011 ) , Air india $1.75 to 200. Combined los $2.5 Billion (1250 crores) Reason could be global downturn as well as rise in fuel prices, very high capital investments, very few new entrants trying their luck. Easy for new Airlines to enter, but difficult to exit and more difficult to make profits
  • 3. CHALLENGES FACED BY AIRLINES INDUSTRY IN INDIA Govt regulations for airlines to fly on financially unattractive routes Poor state of industry due to cut throat competition, high fuel prices and high taxes Repeated bail out for Air india made it a challenge for private sector airlines to achieve commercial viability in a competitive market Cost of domestic airport infra structure born by airlines
  • 4. INTRODUCTION: KINGFISHER AIRLINES Chairman – Vijay Mallya Chief Executive officer- Sanjay Aggarwal Established in 2003 Head office – Mumbai Registered office – Bengaluru Owned by United Breweries Group Started full service in 2005 with a fleet of four new Airbus A-320-200 operating from Mumbai to Delhi In 2007 Acquired 26% stake In Air Deccan and later increased to 50 % and org merged, renamed as Kingfisher red as low cost arm of kingfisher airlines 2008 KF commenced international operations connecting Bengaluru with London. 2011 KF airlines served 63 domestic destinations aand 8 international destinations in 8 countries across Asia and Europe. Became India's best Airlines won many awards
  • 5. • Offered three classes of travel on domestic route and two classes of service on international routes. • King fisher first- Premium class • Kingfisher class- standard class • Kingfisher red - the no frill class • Rapid expansion and excellent service offerings to its customers it Started facing challenges in making profits • It never made profits since it started operations in 2005 • There was no sign that the airline was moving in the direction of financial viability • By Sep 2011 the accumulated losses were 5960 crores. Its debt of about 8000 crores from about 13 different lenders who refused to lend in Nov 2011.
  • 6. Some analyst believe that the decision to merge kingfisher and Air Deccan was a mistake. Kingfisher airlines and kingfisher red offered similar services without leveraging the benefits of full service or low costs. In Nov 2011, KF cancelled 35 flights. DGCA sought explanation from Kingfisher management Nov 15, 2011 Vijay Mallya chairman and Sanjay Agarwal CEO addressed a press conference Clarified that the cancellation were the result of a well planned initiatives and part of a long term restructuring process. However it could not convince customers, even employees , crew, pilots were taken into surprise.
  • 7. STAKE HOLDERS - CUSTOMERS • Best services ( food, entertainment etc.) • King club • Lounges at airports. • Very loyal customers. • Flight cancellations and other cost cutting led to discontent • The question was whether the company was willing to risk its only set of satisfied stakeholders.
  • 8. SUPPLIERS • Many suppliers without whom the company would sink. • SBI was the leader of the consortium of 13 banks that did not provide further financial support at the end of 2011. • The story with the suppliers of aircraft was no different. (GE commercial aviation services ) • Fuel suppliers started dealing on cash basis due to delayed payments. • AAI – Pending dues of 200cr.(CHEQUES BOUNCED) • What could Kingfisher do to improve its relationship with its suppliers? Could it afford to displease them any longer?
  • 9. EMPLOYEES • Kingfisher Airline had staff strength of 6,000 in 2011. • Delayed salaries every month since July 2011. • The DGCA report suggested that 24 pilots had left the airline in NOV – DEC 2011. • Employees had to face irate customers due to the cancellations. • What could Kingfisher Airlines do to improve the morale of is employees? • Would its actions influence the kind of talent it would attract and impact the quality of service it could offer in the future?
  • 10. SOCIETY • Several agencies of the government were unhappy with Kingfisher Airlines. • Kingfisher Airlines had asked the government to help it survive by ensuring three-months of credit period from its suppliers. • Government tried to put pressure on the public banks but the All India Bank Employees Association demonstrated to oppose any bailout of the airline.
  • 11. • The DGCA was quite damning of the airline. It even indicated that withdrawing Kingfisher’s license to fly was an option. • The service tax department had frozen the bank account of Kingfisher for non-payment of dues. • What could Kingfisher do to win back the support of the larger society and the government and its agencies so that they would provide the flexibility and support needed by the airline to recover?
  • 12. OWNERS • Kingfisher shares that had traded at about 48 per share in April 2011 traded close to 20 per share in November 2011 • The shares of Kingfisher’s holding company, UB Group, that traded at about 315 per share earlier in the year was down to 82 per share. • What could the management of Kingfisher do to restore the confidence of its shareholders? • Could it afford to keep shareholder concerns on the back burner for some time and let share prices fall further while it addressed the concerns of the other stakeholders?
  • 14. THREATS FROM COMPETITORS: Poor state of the industry can be attributed to another three factors: -cut-throat fares -high fuel prices -high taxes. Cut-throat fares that started the price competition which forced all the airlines to lower prices. Contributed to growth in passenger volumes, but had hurt the finances of all the airlines. The repeated government bailouts for Air India made it a challenge for private sector airlines.
  • 15. THREATS FROM NEW ENTRANTS: Threat from new entrants is medium to low. People may have a relative high preference on major brand base on safety and convenience concerns Capital requirements are high. The major players in the Indian aviation industry form an obstacle to foreign airlines. Indian flyers prefer to have an Indian experience on the flight.
  • 16. THREATS OF SUBSTITUTES: • Introduction of high speed trains, high tech buses and other means of transport. • There is no switching cost. • People can take other transportations other than airplane if they travel domestically, or their business is not in a rush, it may spend longer time but less money.
  • 17. BARGAINING POWER OF SUPPLIERS: • Two main suppliers in airline industry are -fuel suppliers and -aircraft suppliers. • They have high bargaining power, since there is limited number of suppliers; companies have to use fuel and there is no substitute currently. • Also, companies will choose a trustworthy supplier, which means the scope of suppliers will be narrowed down to fewer choices
  • 18. BARGAINING POWER OF CUSTOMERS: • The bargaining power of the customers is low since kingfisher is designed to meet the total comfort and value for money. • Kingfisher Airlines was credited with transforming service levels. • Its lounge facilities at various airports established new standards in services not seen in India before. It had managed to create a very loyal customer base that would support it.
  • 19. GOVERNMENT POLICIES: • Owing to government regulations, there was a need for airlines to fly on financially unattractive routes. • Airlines were forced to incur some losses they could otherwise have avoided if they were run on purely commercial grounds. • Government restrictions on the petroleum industry, the airlines needed to buy aviation turbine fuel at very high prices.
  • 20. LEARNINGS Service businesses should not operate in such a touch and go manner. They where extremely confident of their to find fixes on the fly. Temporary JUGAAD Its better to take a ego hit in time rather than to run the business bleeding. Should have steadily phased down to few dozens of services
  • 21. LEARNINGS Aircraft inflight entertainment system was the USP at one time, but it added to a huge cost which was NOT affordable. Full service flights should have cut down to only affordable routes. Not to loose focus.. Stick on one thing, do it right and then move to another They tried many things all at once which they couldn't cope with financially
  • 22. FOCUS ON SINGLE SET OF STAKEHOLDERS The company focused only on the costumers and kept neglecting other 4 stakeholders, which eventually led to bankruptcy.

Editor's Notes

  1. FINANCIAL INSTITUTIONS, AIRCRAFT PROVIDERS FUEL SUPPLIERS SBI WANTED MALLYA TO PUT IN NEW FRESH EQUITY
  2. At the same time, several agencies of the government were unhappy with Kingfisher Airlines and were quite ready to disengage with Kingfisher, which would eventually mean that the airlines would have to shut down at least its domestic services
  3. Shareholders are the owners and have a residual claim on the assets of a company. Quite clearly, during the crisis, the shareholders had lost a significant amount of confidence in the top management of the company. The share price reflects the confidence the owners have on the future earnings of the company.
  4. Air India was responsible for the cut-throat fares that started the price competition which forced all the airlines to lower prices.
  5. The introduction of high speed trains, high tech buses and other means of transport has given more options to people to travel.  There is no switching cost. People who travel long distance or want to get their destination fast will have few or no substitute. People who travel long distance or want to get their destination fast will have few or no substitute, such a scenario it is imperative for any airline to build its brand and have a focused marketing strategy in place.
  6. Kingfisher Airlines was credited with transforming service levels offered in the airline business in India by focusing on services such as good food, personal screens on domestic flights, and airline ushers who attended to customers as they arrived at the airport