Kingfisher AIRLINESEMERGENCE TO CRISIS

3/17/13

SUBMITTED BY : SURBHI- 138 SHANTANU CHANDRA- 150

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CONTENTS
KINGFISHER EMERGENCE
Introduction Vision Key

,Values & Mission Statements

People Analysis Efforts

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History SWOT

Marketing

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KINGFISHER AIRLINES

Kingfisher Airlines is an airline based in Bangalore, India. Termed as the first full frills-true value carrier. Click to edit Master subtitle style

Kingfisher Airlines has received 30 awards for innovation, customer responsiveness and was voted The Best New Airline of the Year within months of its launch.

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VISION

The Kingfisher Airlines family will consistently deliver a safe, value based and enjoyable travel experience to all our guests

VALUES

Safety Services Happiness

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MISSION

Be the most successful Full Service, True Value airline operating in India. Create a following of fans and not just loyalists. Drive addiction to Kingfisher Class and Kingfisher First.

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KEY PEOPLE

CMD: Dr. Vijay Mallya CFO: Sanjay Aggarwal CFO(Finance): A. Raghunathan EVP(Operations and Engineering): Hitesh Patel EVP(In - flight Customer Service & Cargo):

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HISTORY

Kingfisher Airlines was established in 2003. It is owned by the United Breweries Group. The airline started commercial operations on 9 May 2005 with a fleet of four new airbus: A320200s operating a flight from Mumbai-New Delhi. It started its international operations on 3 September 2008. Kingfisher Airlines through its parent organization, United Breweries, had a 50% stake in a low cost 77

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HISTORY

In May 2009, Kingfisher Airlines carried more than 1 million passengers, giving it the highest market share among airlines in India. Kingfisher Airlines also won the Skytrax award for Indias best airline of the year 2011.

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SWOT Analysis
Strengths

First airline with full new fleet of aircraft Quality hospitality provided to customers Route rationalization Already have training academy
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SWOT Analysis
Opportunities
Under

penetrated domestic market market

International

Untapped

air cargo market tourism industry

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Expanding

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SWOT Analysis
Weaknesses
Service

delivery to metros and other big cities

Yet

not in profit ticket pricing attrition in top brass

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High

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SWOT Analysis
Threats
Existing

operators issue

Infrastructure

Fuel

price hike slowdown

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Economic

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MARKETING EFFORTS DRIVING KINGFISHER BRAND STRENGTH

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KINGFISHER DOWNFALL

Ravi Nedungadi, CFO, UB Group, warned Group Chairman, Vijay Mallya of the perils of entering the aviation business in 2005. He suggested not to enter the sector which requires regular infusion of funds. Since inception in 2005, it has never made
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THE REASON

No Network Planning- A me too approach Kingfisher tried to copy the network of arch rivals Jet Airways. It shifted its international base from Bangalore (where it was the sole carrier offering a wide variety of services) to Mumbai - the home base for Jet Airways and Air India.

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POLITICAL REASON

High Jet fuel prices and weakening rupee. The ex-aviations minister Vayalar Ravi being tonedeaf to Mallyas demand for 49% FDI in Indian carriers. High sales tax imposed by state government on jet fuel prices. However, the new minister Ajit Singh cleared both his demands (FDI in aviation and direct import of jet
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Crisis

The crisis started in November 2011. Kingfisher Airlines could not pay pilots and stewardesses, jet fuel prices and janitors. It has a debt of Rs. 7000 crores even after Rs. 1400 crores was written off in 2011. The airline made an operational loss Rs. 1027 crores over 2011.
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BPCL has even filed a court case for recovery on unpaid dues of over 250 crores. It owes the Airports authority of India, undisclosed landing charges. It has absolutely no assets that it can sell or mortgage. In December 2011, for the second time in two months, Kingfisher's bank accounts were frozen by the Mumbai Income Tax department for nonpayment of dues.
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BAILOUT ATTEMPT ANALYSIS

At the time of restructuring , Kingfishers total debt was Rs. 8,414 Crores. The bankers converted approximately Rs 750 Crores to equity. In Lieu of Waive off the banks got a 23 % stake in the airline. The banks lost about 300 Crores in the transactions.

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DEBT RECAST

When the banks took up a 23% stake in KFA at the cost of Rs. 750 Cr, it was in the form of Compulsory Convertible Preference Shares (CCPS). In addition to that, Rs 533 Crores of debt was converted to Compulsory Redeemable Preference Shares (CRPS) to be returned at a later date.

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POSSIBLE SOLUTIONS
Financial Customer Internal Profitability Fewer Planes and more customers Flight on time and lowest prices

Lower turn around time, fast ground clearance Ground Crew Skills
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Learning

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RECENT NEWS

Kingfisher airlines is in talk with two foreign carriers including IAG owner of BA and Iberia for a potential rescue package. Kingfisher Airlines loses license. UB to use Diageo deal funds to cut KFA debt. No cash and now it has no jets to fly. Mallya surprises staff by paying salaries.

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THANK YOU

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