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EXECUTIVE SUMMARY

Kingfisher Airlines has spread its name far and across for its high levels of customer satisfaction through excellent service. This project was carried out in order to get acquainted with the processes and methodology of customer management. We carried out a research through employees, websites and articles in order to understand the Kingfisher Experience. The report here gives a detailed analysis accompanied with facts on the high customer satisfaction levels. It helps to figure out why Kingfisher Airlines stands out in the civil aviation industry in India. The chairman, Dr. Vijay Mallya is the man behind the great success. He has formulated values, vision and culture in a way that puts the customer first. It follows the key values of Safety, Service, Happiness, Accountability and Teamwork. It is a result of the synergies of all departments and employees focussed mind on perfection in service delivery. VIBRANT AIRLINE This was how once The Kingfisher Airline owned by the UB spirits owner Mr. Vijay Mallaya was perceived. Due to various reasons which shall be covered in this report this airline took the downward path and today seems non-existent in the Indian Aviation Industry. This report covers few areas behind what went wrong and led to this crisis and what have been the passenger experiences and image of the airline.

Contents
1. Introduction 2. From the Chairmans desk 3. Objectives of the study 4. Branding Kingfisher 5. Services provided by the airlines 6. Ratings and Experience of the travelers 7. Timeline 8. Ratings and Experience of the travelers then 9. What went wrong 10.The future

INTRODUCTION
Kingfisher Airlines Kingfisher Airlines started by flamboyant beer baron Vijay Mallya in May 2005 shared the name of Indias leading beer brand. Though originally conceived and announced as a value carrier, Kingfisher rapidly morphed into at a Jet fullAirways. service airline more in2007, keeping with Mallya s aircraft style and went head By September Kingfisher had 34 in its fleet (4on A 319, 12 A320, 6 A 321, 12 ATR 72) and served 34 destinations. The airline had 51 A 320 family aircraft on order for delivery by 2014, 35 ATR aircraft on order for delivery between 2006 and 2010, and 50 wide bodied aircraft (including the A380) on order for delivery between 2008 and 2018 for a planned international expansion

FROM THE CHAIRMANS DESK

Dear Guest, I intend to make Kingfisher Airlines the best in the world and pursue this goal seriously; as I am sure you pursue your goals equally seriously. I have always aimed at delighting you and giving you nothing but the best. It is my passion to deliver a world-class experience. And since work and play can go hand-in-hand, I am sure you need some time to relax in the skies after several pressing commitments and stressful work obligations. I make this happen, by being personally involved and ensure that every Kingfisher aircraft meets the global standards that I have set in terms of safety. I am proud of our brand-new fleet which incorporates the latest technology available. I have insisted upon a personalised entertainment system for your personal viewing and listening pleasure, to create an environment that you will truly cherish. Aboard every Kingfisher Airlines flight you will meet your crew that I have hand-picked and approved after a rigorous training programme. They have been instructed to treat you in the same way as if you were a guest in my own home. So, leave the stress of daily life behind and enjoy a Five Star experience with Kingfisher Airlines. I try hard to exceed what you expect, however, if I have missed something or fallen short of meeting your expectations, please feel free to mail me directly at chairman@flykingfisher.com I invite you to fly Kingfisher Airlines and experience an unforgettable journey my team and I strive to create every day. Warm personal regards, Dr. Vijay Mallya Chairman Kingfisher Airlines

Objectives of the study


To study the changing perceptions and views of the Travelers To study the crisis and downfall of the carrier

branding kingfisher

KFA is a pioneer in the concept of bringing luxury, glamour and lifestyle to the skies3. The brand image of the parent Kingfisher brand gave further credibility to its marketing campaigns, featuring India's then top models. Kingfisher airlines sold the concept of lifestyle through its glamorous airhostesses, red-the color of vibrancy, and added hospitality which made every passenger feel like a guest on board-a-craft. It marketed itself as a budget airline targeting the middle of the market. It used multiple promotional campaigns, from having India's top model Yana Gupta on flight, to schemes on discounted tickets, initially, to invite people to experience the 'good flying' concept. Some of these initiatives have been summarized in Exhibit 1. However, the airlines industry soon entered a phase of consolidation with mergers like Jet- Air Sahara and Indian Airlines-Air India. This eroded the KFA value offering. Unfazed, Kingfisher evolved into a full-fledged carrier and continued to pursue aggressive marketing strategies, sometimes even entering into advertisement wars with its competitors. At the same time, the Indian economy started to boom and the airlines industry entered a phase of unprecedented growth. This launched KFA in to its growth phase.

SERVICES PROVIDED BY KINGFISHER AIRLINES


ry step of the way, from baggage handling to boarding

music -flight entertainment to take-off with Personalized video screens and headphones broadcasting 5 video channels of the trendy FUN TV and the exclusive Kingfisher Radio - 10 channels of chartbusting music from across the globe. : They have done everything possible to ensure it. With the most sophisticated communication, navigation and security systems - both in the air and on the ground. As well as with a highly trained and skilled team of pilots and cabin crew who operate in completely state-of-the-art paperless environments.

headrests. The superbly groomed flight attendants will ensure that the guests are well taken care of. and beverages is available on board with an individual Menu Card for every guest to enable them to choose from the finest on offer.

the flight position. It continuously keeps track of the aircraft's altitude and speed, as well as flight time remaining to keep the guests on top of things at all times.

These services provided by Kingfisher Airlines shows how market oriented the top management is starting from the chairman Dr. Mallya and the different means they have to ensure customer satisfaction by providing excellent service.

Kingfisher Airlines understands customer needs through feedbacks. The website of Kingfisher contains a feedback page where anyone is free to write their feedback. These are evaluated by the guest commitment team of Kingfisher headed by the Chairman himself. Whenever a passenger asks to give a feedback his feedback is taken at the terminal in the current working system. Kingfisher Airlines with its inevitable charm has the capability to acquire new customers by providing services that many international airlines have failed.

THE RATINGS OF THE TRAVELERS AND EXPERIENCE


Ms Shietal Rane, a customer once traveled from Mumbai to Jaipur. This was the first time she was traveling through a domestic airline. Although she had traveled earlier to Europe, the poor condition of the aircraft and the bad service made her lose the charm of flying. But Kingfisher Airlines proved her wrong by treating her like a guest rather than a passenger. The everlasting experience she had, made her rate Kingfisher Airlines as a 5 ***** airline. She points to travel by Kingfisher whenever she travels in the future. Jonty Rhodes, the South African cricket legend feels that when in Kingfisher he feels like a guest as Dr. Mallya says a guest in my own home. According to him Kingfisher flights in India are by far the most welcoming domestic journeys that he undertaken at 30,000 feet. Dr. Vijay Mallya has redefined airlines in India. The actual experience onboard is exactly the same that has been portrayed in the promos.
KINGFISHER AIRLINES customer review : 5 July 2010 by Hirofumi Suda (India) Value for Money: Trip Rating : 9/10 Recommended:

Cabin Flown: Economy

Bangalore to Kolkata. The flight was actually operated by Kingfisher Red, which is the low- cost version of Kingfisher Airlines, and plane was used as ex-Air Deccan aircraft. I knew that Kingfisher Red flights serve a meal, so I was expecting a kind of snack but was actually a hot meal of veg biryani which was tasty. Rounds of water came several times. Cabin attendants top-notch.
KINGFISHER AIRLINES customer review : 3 July 2010 by Rajan Parrikar (USA) Value for Trip Rating : 9/10 Recommended: Money:

Cabin Flown: Business

LHR-BOM in Kingfisher First on A330. The cabin crew was outstanding and made for a pleasant, comfortable flight. Overall a first-rate product. I have one issue regarding the seating, when all seats are laid out into flat beds, those in the window seats have to step over the adjacent seat to get out. Another minor quibble is the trashy in-flight magazine.
KINGFISHER AIRLINES customer review : 1 July 2010 by E McCaffery (UK) Value for Trip Rating : 10/10 Recommended: Money:

Cabin Flown: First

BOM-GOI-BOM in Kingfisher First. Service was first class and reminiscent of what it used to be like in the halcyon days of air travel! Pleasant, courteous staff were on hand to cater for any requests and ground handling to die for - all luggage (including on board hand luggage) carried and passengers escorted right to outside of terminal to whatever onward transport had been arranged. Comfortable seating for domestic leg and equivalent in width and pitch to international business class - puts BA Club Europe to shame! Definitely the airline of choice on any route in the Indian subcontinent.

TIMELINE
2005: Kingfisher Airlines began its operations on 9th May 2005 with its inaugural flight being from Mumbai to Delhi. Who at that point of time would predict that 7 years down the line, this shinning A320 would be the only flight operative out of over 200 other routes? Indian Airlines was nowhere close to be quoted as a class a part carrier so only Jet Airways and Sahara were dominant players in the Indian aviation industry. Kingfishers income for year ending on 30th June 2006 was INR 13.5 Billion but this amount couldnt over shadow losses amounting to INR 3.4 Billion. 2006: Kingfisher Airlines was soon becoming an airline synonym with five star air travels and was becoming famous among business travellers. In December 2006 Kingfisher announced that it would provide live in flight entertainment which was first in its class by partnering with DTH pioneer Dish TV India Limited. Also the airlines went in some serious talks with Air Deccan which was supposedly working on a totally different and virtually an opposite business model providing extremely low fare based services. The income for period ending 30th June 2007 increased to INR 4.1 Billion but losses also accumulated to INR 4.19 Billion. 2007: Things were pretty much on right track and were almost going as per plans. Kingfisher had carried 17.5 Million passengers with a fleet of 41 aircrafts and a schedule of 255 flights. Ironically the situation today is such that Kingfisher is fighting to even fly mere 10% of those flights. Finally by the year end on December 19th 2007 Kingfisher Airlines acquired entire 46% of Deccan Aviation in Air Deccan. The period ending 31st March 2008 generated gross income of INR 15.4 Billion and losses dramatically were reduced to INR 1.8 Billion but this does not include the aftermath of merger of Deccan. Since it was a streamlined and well planned year by Kingfisher, this year proved to be the best year right from inception till today. 2008: Kingfisher Airlines finally became the larger passenger airliner of worlds second most populous nation. Now Kingfisher was carrying 10.9 Million passengers annually with a fleet of 77 aircrafts operating 412 domestic flights daily. Also this year was quite historic was Kingfisher Airlines as it finally got permit to operate on international routes and on

September 2008 Kingfisher flew for the first time overseas from Bangalore to London. Kingfisher was no offering 3 classes of travel to passengers: Kingfisher First: Premium Business Class which was truly best in class, Kingfisher Class: Premium Economy or the basic economy of flagship carrier Kingfisher and Kingfisher Red: Low fare basic class or in other words the new name of Air Deccan. Financial statements for year ending March 31st 2009 were actually supposed to be consolidated statements of both Kingfisher Airlines and Air Deccan hence now the income increased many folds to INR 55 Billion but so did the losses which increased to INR 16 Billion. 2009: Kingfisher Airlines continued its run of the being the nations largest passenger carrier and was having a healthy market share of 22.9% with 11 Million passengers flying with Kingfisher in last fiscal year. The fleet although got reduced to 68 aircrafts from 77 aircrafts and domestic flights per year got reduced to 366 but international operations increased significantly to 12 flights daily. During the year Kingfisher won numerous accolades from agencies around the globe and continued being rated as Indias only Five Star Airline by Skytrax for three years in a row. It had been 4 years since birth of Kingfisher Airlines and shareholders were still waiting to receive first dividend from the company but company continued its run of losses and reported a marginally increased losses of INR 16.4 Billion and gross income shrunk to INR 52.7 Billion for year ending March 31st 2010. 2010: The dark clouds over Kingfisher Airlines were getting darker and dense with no ray of sunshine. Jet Airways (Undoubtedly a much stable and sustainable carrier but also badly affected financially due to its acquisition of Sahara Airways) surpassed Kingfisher Airlines to become countrys largest passenger airliner as it reported a market share of 25.5% whereas for Kingfisher it came down to 19.8% down by almost 3% from last year. There was one player in the industry which was finally getting noticed IndiGo as it reported a good 90% seats being filled and was gaining market share rapidly. Kingfishers domestic daily operations were same 366 flights daily but its international operations increased to 28 flights daily. Despite of the increase in flights, Kingfisher failed to capture market unlike its competitors and this should have been considered as a red flag by the company which unfortunately went unnoticed by the company. The airline reported an increased gross income of INR 64.9 Billion and reduced losses of INR 10.2 Billion for the year ending 31st March 2011.

2011: Kingfisher Airlines for the very first time declared in year 2011 that it is having some serious cash flow problems. It simply blamed the same to rising fuel costs. Now the thing that needs to be noticed is that when Kingfisher was not paying its dues to oil companies then how the fuel costs would hit its cash flows so deeply? Dozens of pilots left Kingfisher for rival airlines during 2011. Creditors warned the firm that if it would fail to raise almost USD 159 Million in equity then they will not be able to restructure its debt. But Kingfishers top brass believed that they would continue being the way they have till now but the problems were bound to get really out of hands. The income for year ending 31st December 2011 stood at approx. INR 13.4 Billion which was lowest since 2007 and the losses increased sharply to INR 4.4 Billion. 2012: The most turbulent year of all for Kingfisher Airlines is here. The New Year celebrations were not even over yet when on 5th January 2012 State Bank of India (largest creditor of cash strapped Kingfisher Airlines) declared Kingfisher Airlines as a nonperforming asset. SBIs exposure to Kingfisher is staggering over INR 14.5 Billion. It was like a mother saying to the world that his child is useless now and nothing can be expected out from him. Things were now out of hands of the management of Kingfisher and it declared 2000 job cuts along with longer work hours. Seemed like someone in the management assumed Kingfisher to be a manufacturer and not a service provider where each employee is a jewel for the firm. For the very first time the man himself Mr. Mallya declared that the airline was in dire need of funds in order to maintain operations. And on 18th February the airline became headline of almost all newspapers when it grounded most of its aircrafts and declared that it is operating mere 28 aircrafts with curtailed schedule of 175 daily flights. The consortium of banks led by SBI also declined to further issue more debt to Kingfisher until and unless Kingfisher itself raises some funds through fresh equity. Now Kingfisher Airlines all accounts stand frozen by banking agencies and export import houses due to nonpayment of dues. Also The International Air Transport Association (IATA) has suspended Kingfisher from its International Clearing House dealing a fresh blow to the ailing carrier as it seeks funds to stay aloft.

TRAvEllERS REvIEwS AND ExPERIENCE THEN

"DONOT USE THEM" 2012 We were due to fly from Mumbai to LHR and they just decided to cancel flight. Then we were told that we were on our own to book another flight with another carrier. No compensation was offered. Their customer service was non existence and was very stressful. we had to purchase another ticket at extortion cost to us, because the travel agent know we were in trouble. I ADVICE TO ANYONE DO NOT THIS COWBOY airline. They will not care about you if things go wrong........

"how the mighty have fallen" couldnt recommend them enough previously BUT they have gone steeply downhill since 2010. Flew MUM-LHR May 2011 and had a very poor aircraft with broken bits on the seats, dirty food trays, several screens not working, a very poorly organised entertainment menu, v poor selection of inflight entertainment, no kids pack only a pathetic mag but no pencils, colours or pens, very spicy kids meals (my kids are indian and are use to spicy food normally!), phone customer care were incorrect on several things (they told me I only had 23kg weight allowance when it was actually 28kg, told me golf kit would only count as 6kg towards my checked in weight and would only have to pay excess if exceeded my weight allowance - not true, had to pay excess) and unhelpful. 2011 june this airlines is such a joke...please do not use them especially for domestic flights... the service is so poor.. run like a bus station.. i travelled whilst in india domesticaly as well as long haul aswell and each flight was delayed sometimes by 6 hours, N one knows what is going..please do not use this airline you will regret it.. I have complained but am being totally ignored as the cannot answer my question... should be renamed KINGSHITTER AIRLINES really bad plane tv screens were not working.food was. awful the child meal was to spicy .entertainment was not good really old movies.was disappointed 2011 dec I am sorry to say that i have had one of the worst experience. This was my third trip that i have had with this airline and you can easily see the standards that has dropped down to the standard that was when it initially started. Food was rubbish, Menu said one thing and the serving was totally different. The Air-hostesses were rubbish and completely in-experienced and the check in staff didn't understand what the passenger wanted. All i wanted was a window seat for my 12 year old, even after explaining they didn't give it to us nor did they bother to explain or inform us, in fact on our return trip we were given tail end seats that was very bad and very stupid although we were the first ones to check in. Treatment towards the foreigners who were seated next to us was better then for the Indians, i would like to know why. I have vowed never to fly with Kingfisher ever again, i would prefer Jet Airways, who has kept up to their standards from Day 1. Outbound journey was horrendous, served us lamb goulash with mash potatos which had gone off. Flight was delayed in Mumbai by 4 hours to go to Goa. On the inbound they served us some refreshments just before landing to Heathrow and that upsetted my son's and my stomach, i mean what's going on on Kingfisher Airline? Definitely not a good EXPERIENCE... KINGIFISHER EXPERIENCE!!!! paid hell lot of money to travel by this airline but very very unhappy and dissatisfied..

What went wrong?


Findings It cannot be understood that why airlines tried to replicate business models of international LCCs (Low Cost Carriers) RyanAir or Southwest Airlines (Exhibit 14)? Is low cost the only way to make money? If this would have been the case then Singapore Airlines would have been bankrupt by now. It looks like that Kingfisher failed to study the models carefully and blindly acquired Air Deccan. The primary way any low cost carrier makes money is by operating on nonprimary routes using secondary airports which reduces costs for the airlines and then the benefits are passed on to the customers unlike Kingfisher which charged low fare for Kingfisher Red but continued operating at prime routes including metros. Kingfisher should have avoided flying even a single aircraft to metros and should have taken advantage of hundreds of uncommon routes and we all know that India is under penetrated market and much advantage could have been taken by exploring newer routes. Kingfisher was a five star airliner then there was no reason to operate on two different business models at the same time. These were simply the over ambitious plans of the management of Kingfisher Airlines. When Kingfisher First penetrated the Industry it segmented itself and branded itself as an extremely posh , vibrant and larger than life airline. This attracted lots of Travelers especially the upper middle class and rich as it was a kind of status symbol to travel by Kingfisher. The only problem was that the Owner of a spirits company hadnt gotten into the aviation industry for the right reasons. There was no proper survey done, no forecasting done which was one of the very few reasons for the huge failure. The whole branding, packaging and portraying of the airline initially drew many passengers however the inside story was not hidden for too long and the operations and services were not appreciated gradually. In this report we find out how the impression of the travelers changed and kept declining.

After going through secondary data ad conducting a survey about understanding the plight of the airline and its impact on the passengers the finding has been that unlike its fancy stance the airline failed in number of aspects. The services lacked standard, the prices were unnecessarily hiked and the quality kept diminishing.

Kingfisher Airlines was a favourite among business travellers hence it should have continued being a business centric airlines and even if it would have increased the prices say by ten per cent business travellers would have still travelled by Kingfisher only because they were sure of getting five star treatment along with on time departures and arrivals. Kingfisher most probably believed that people in majority are more important that people in minority but it forgot that there are four other players in the country serving the majority of people and it was the only one serving the minority and hence failed to capitalize upon its own strength and unique selling point (USP). Bargaining Power of Buyers: Since Kingfisher Airlines decided to introduce Kingfisher Red it automatically entered into a price war against all other carriers especially domestically. If Air Deccan was offering tickets for meagre one rupee then naturally Kingfisher had to continue such kind of marketing campaigns. But the problem was that Kingfisher almost trashed all the marketing strategies of Air Deccan thinking of reducing operational costs but here came the deviation. Airline business has extremely long gestation periods. For Kingfisher, Air Deccan was a totally new business so it should have considered that Kingfisher Red will take some years to completely reap benefits of being a low cost carrier but Kingfisher believed that Air Deccan has been in the market much before Kingfisher Airlines so it should bring Kingfisher Airlines financial statements into green very soon. The business fliers which were earlier loyal to Kingfisher Airlines used all their frequent flier miles, bought free tickets, gave the same to their family to enjoy and they never returned back to Kingfisher. For them Kingfisher Airlines became a compromised airliner and they started going back to Jet Airways which also is cash strapped but has a sustainable business model. As soon as Kingfisher realised that they had committed a mistake by changing model of Air Deccan, it in a haphazard way increased prices of Kingfisher Red and brought the same on par with other airlines. At this point of time Kingfisher Red

had become a lost opportunity and even the management was confused if it would call it a normal carrier or a low cost one. Finally in February 2012 the brand Kingfisher Red was officially declared nonfunctional, marked one of the biggest examples of failed consolidation and became a land mark failure in terms of merger and acquisitions. Aircrafts: Aircrafts are the most important assets of any airliner.

The Future

Kingfisher Airlines is unofficially bankrupt and officially out of funds. The difference between two statements? Kingfisher Airlines is operating without any cash. The bank accounts are frozen and customers are not willing to fly with the carrier. The steps Kingfisher Airlines must take now accumulated losses of Rs.6,524 crores, outstanding loans of Rs.7,057 crores, overdue to tax authorities, airports and fuel suppliers, and less than half of its fleet flying, Kingfisher does not present a pretty picture for any airline company. If Kingfisher Airlines wants to fly then the promoters need to induce few thousand millions. With that money they should first clear due of oil companies, IATA and other regulatory authorities otherwise Kingfisher would fly into sunset.

give Kingfisher one last chance last year by infusing capital which was on request converted into shares but due to landslide fall in share price of Kingfisher Airlines, the investments of Banks have almost eroded. Consortium of banks in any case will not pour good money after bad. The promoters need to give personal guarantees in order to raise funds. d to invest in Kingfisher Airlines, they would be looking forward to restructuring of the airline. So promoters and board of Kingfisher Airlines must restructure the entire business model of the airline before they approach for investors. They must make the fundamentals of the airline very clear and instead of gifting free Kingfisher Calendar with an investors presentation, Kingfisher Airlines must give an assurity report to investors explaining how the airline can capture the lost market share. ots and staff of Kingfisher Airlines are unpaid since several months. Indirectly the safety seems compromised here. The issue of unpaid salaries must been getting discussed in the cockpits as well and the quality pilots would have joined rivals. Kingfisher Airlines must clear their dues as well or at least assure them of enough funds which would not put any financial pressure on families of

pilots and staff otherwise sooner or later Kingfisher would become a serious victim a major air mishap forcing it to shut down operations.

has given for new aircrafts. Cutting down the fleet means that it would owe fewer amounts to lessors which would in turn mean better cash flows. Also Kingfisher is bound to cancel order for new planes. It cannot operate on existing routes so how it can operate on newer routes? Instead of operating on heavy charging metro airports, Kingfisher must focus on secondary cities which primarily have smaller airports. No one can say that such airports do not have much passenger traffic, but most would believe that such airports do not charge hefty charges lifting up some operational cost pressure from Kingfisher Airlines and this would also help Kingfisher to lure investors.

easily do is forcing oil companies to provide tax free aviation fuel to Kingfisher for the time being. Also government along with Reserve Bank of India can guide the banks to release the accounts of Kingfisher for a certain guaranteed period of time till which Kingfisher can assure of a proper restructuring plan.

Airlines then it will be "privatisation of profits and socialisation of losses". Hence some really punishable steps must be taken by banks instead of acting soft on Kingfisher Airlines. They must convert the entire debt into equity. This way they will recover a part of their investments. Also since banks are major stakeholders of Kingfisher Airlines, they must act tough and force the flamboyant namesake promoter to exit Kingfisher Airlines and some responsible backed by banks person must be given the responsibility of being the Managing Director of the airline in the last bid to turn around the airliner. No wonder that once Indias number airline is on the brink of complete shutdown, Kingfisher Airlines was started with a very basic motto providing high quality and luxurious air travel. It has to live up to the same motto and the only way to do so is to reinvent itself and new skies await the never ending journey of Kingfisher Airlines.

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