Analysis of Kingfisher. Essay

Introduction baronfisher lineline is a private airline based in Bangalore, India. The airlines owned by Vijay M completelyya of United Beverages Group. Kingfisher Airlines started its operations on May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. The airline currently operates on domestic routes. The destinations covered by Kingfisher Airlines atomic number 18 Bangalore, Mumbai, Delhi, Goa, Chennai, Hyderabad, Ahmedabad, Cochin, Guwahati, Kolkata, Pune, Agartala, Dibrugarh, Mangalore and Jaipur.In a all of a sudden span of time Kingfisher Airline has carved a niche for itself. The airline offers several unique armed go to its customers. These include ain valet at the aerodrome to assist in luggage handling and boarding, accompanied with refreshments and music at the drome, audio and video on-demand, with extra-wide personalized screens in the aircraft and three-course gourmet cuisine.Kingfisher is champion of only 6 airlines in the world to have a 5 star rating from Sky tax, along with Asian Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Cathay Pacific Airways. In a short span of time Kingfisher Airline has carved a niche for itself. The airline offers several unique services to its customers.These include personal valet at the airport to assist in baggage handling and boarding, exclusive lounges with private space, accompanied with refreshments and music at the airport, audio and video on-demand, with extra-wide personalized screens in the aircraft, tie beam shoess with extendable footrests, and three-course gourmet cuisine.HISTORYKingfisher Airlines is a subsidiary of the UB Group, one of the largest beverage companies in the world. The branding of the airline is linked to that of Kingfisher Beer, Indias largest brewery. The airline, which is headed by the magnetic Dr Vijay Mallya, took to the skies in May 2005, and attracted attention for its high quality product with personal in flight entertainment in both seat custom upcountry designs for each aircraft valet assistance at airports and laudatory hot food and beverages.The airline initially operated a single year service but later on introduced a highly acclaimed First Class, allowing it to compete with Jet Airways for the high yield corporate market. In addition to its A320 family aircraft used on domestic routes, Kingfisher Airlines overly operates ATR-72 turboprops on regional sectors.Under current Indian regulations, which require airlines to operate 5 years domestic service before being granted supranationalistic rights, Kingfisher result not be permitted to operate overseas until 2010. However, the airline has very clear international ambitions, with an order book for 45 wide body aircraft, including A330s, A340s, A350s and A380s.In fitting over ii years, Kingfisher Airlines has achieved a market share of 10% and has one of the most aggressive expansion plans of all Indian carriers during 2007. In Jun-07, it dramatically increase i ts influence in the market with the acquisition of a 26% shareholding in Indias largest LCC, Air Dec go off, for approximately USD130 million, and an open offer for a further 20%.Through schedule coordination and joint operations in ground handling, training, and maintenance, the carriers are projecting annual price savings of over USD70 million. There will also be greater coordination between the two brands, with Air Deccan to adopt the Kingfisher image in its logo and to switch to a red, rather than a blue subterfuge scheme.The combined Kingfisher/Deccan group has a market share of just over 30% and a product range spanning from the price-sensitive, first-time flyer, to the high yield business prompter, devising I tone of the key pillars of the airline industry. The airline which started its operation on 9th May 2005, following the lease of 4 Airbus A320 aircraft. As of July 2007, Kingfisher operates only on domestic routes however it has announced plans to start flights to th e USA with Airbus A380 aircraft.The airline isowned by the United Beverages Group under the leadership of Vijay Mallya (which also owns the popular Indian beer of the like name). The airline promises to suit the needs of air travelers and to provide reasonable air fares. Kingfisher Airlines main luxury component is its In-Flight Entertainment System, a first among Indian airlines. The airliners in-flight erratic Phone and Internet Services will be provided by On Air starting 2008 for long haul flights.VISIONThe Kingfisher Airlines family will consistently refund a safe, observe-based and enjoyable travel experience to all our guests. VALUESSafetyThis is our overriding value. In our line of business, there is no compromise. ServiceWe are all in the hospitality business we must always seek to serve our guests and gain their trust, goodwill and loyalty.HappinessWe seek to build an organization with people who strike to be happy, and will Endeavour to influence our guests and co-wo rkers to be happy too. TeamworkWe will succeed or fail as a team. Each one of us must respect our colleagues regardless of their rank, and we must work to rewardher to ensure our mutual success. AccountabilityEach one of us will be held accountable for the successful execution of our duties, commitments and obligations, and we will strive to lead by instance.MISSIONKingfisher Airlines will have Fly the Good Times approach and this will reflect in the experience we will offer to passengers. SERVICESDOMESTICKingfisher FirstThe domestic Kingfisher First sit down have a 48 inch seat pitch and a 126 degree seat recline.There are lap surpass and mobile phone chargers on every seat. Passengers can avail of the latest international in the buffspapers and magazines. There is also a steam ironing service on board Kingfisher First confines. Every seat is equipped with a personalized IFE carcass with AVOD which offers a wide range of Hollywood and Bollywood movies, English andHindi TV pro grammers, 16 live TV channels and 10 channels of Kingfisher Radio. Passengers also get BOSE noise cancellation headphones.Domestic Kingfisher First is only available on selected Airbus A320 family aircraft. Kingfisher ClassThe domestic Kingfisher Class has 32-34 inch seat pitch.Every seat is equipped with personal IFE systems with AVOD on-board the Airbus A320 family aircraft. As in Kingfisher First, passengers can access movies, English and Hindi TV programmers, a few live TV channels powered by kayo TV, and Kingfisher Radio.The screen is construeled by a controller-console on the seat armrest. Ear cup headphones are provided free of exist to all passengers. The default channel shows, alternating every few seconds, the aero planes ground speed, outside temperature, altitude, distance and time to destination, the position of the aircraft on a graphical map, and one or more advertisements. Passengers are served meals on most flights. Before take-off, passengers are served bottled lemonade.Economy class meal on-board a Kingfisher Airlines domestic flight. Kingfisher RedAfter Kingfisher Airlines acquired Air Deccan, its name was changed to Simplify Deccan and later on to Kingfisher Red. Kingfisher Red is Kingfisher Airlines low-cost class on domestic routes. A special edition of Cine Blitz magazine is the only reading substantial provided.Kingfisher Airlines is the first airline in India to extend its King ball club universal flyer program to its low-cost carrier as well. Passengers can earn King Miles even when they fly Kingfisher Red, which they can redeem for free tickets to travel on Kingfisher Airlines or partner airlines. INTERNATIONALKingfisher FirstThe international Kingfisher First has full flat- hit the sack seats with a 180 degree recline, with a seat pitch of 78 inches, and a seat width of 20-24.54 inches.32 Passengers are given Merino wool blankets, a Salvatore Ferragamo toiletry kit, a pyjama to change into, five-course meals and alcoholic be verages. Also available are in-seat massagers, chargers and USB connectors.Every Kingfisher First seat has a 17 inch widescreen personal television with AVOD touch screen controls and offers 357 hours of programming content spread over 36 channels, including Hollywood and Bollywood movies along with 16 channels of live TV, so passengers can watch their favorite TV programmers live. There is also a collection of interactive games, a jukebox with customizable playlists and Kingfisher Radio. Passengers are given BOSE noise cancellation headphones.The service on board the Kingfisher First cabins includes a social area comprising a full-fledged bar staffed with a bartender, a break-out seating area just nearby fitted with two couches and bar stools, a full-fledged chef on board the aircraft and any-time dining. A turn-down service includes the conversion of the seat into a fully flat bed and an air-hostess making the bed when the passenger is ready to sleep.Both Kingfisher First and King fisher classes feature mood lighting on the Airbus A330-200 with light schemes corresponding to the time of day and flight position. Kingfisher ClassThe international Kingfisher Class seats offer a seat pitch of 34 inches, a seat width of 18 inches and a seat recline of 25 degrees (6 inches). Passengers get full length modacrylic blankets, full size pillows and meals.Each Kingfisher Class seat has a 10.6 inch widescreen personal television with AVOD touch screen controls. The IFE is homogeneous to that of the international Kingfisher First class. It can also be controlled by a detachable remote-control console fitted in the armrest. This device can be used to control the IFE, reading-lights, play games and even has a credit-card swipe for shopping on Kingfishers Air Boutique. It also has a facility for sending text-messages, though the service isnt provided by Kingfisher. CARGOKingfisher XpressKingfisher Xpress is a natural Door-to-Door cargo delivery service from Kingfisher Airli nes. Kingfisher Xpress same day service will be Indiasfirst and only same day delivery by air service. In-flight entertainmentKingfishers IFE system is the Thales Top Series i3000/i4000 on-board the Airbus A320 family aircraft, and Thales Top Series i5000 on-board the Airbus A330 family aircraft provided by the France-based Thales Group.Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on every seat even on domestic flights. All passengers were given a acceptable kit consisting of goodies such as a pen, facial tissue and headphones to use with the IFE system. Now, passengers of Kingfisher class are not given welcome kits but, as mentioned earlier, a complimentary bottle of lemonade and earphones for use with the IFE are still given.The in flight magazines are special editions of magazines owned by Mallyas media publishing house (VJM Media) viz. Hi Blitz for domestic flights and Hi Living for international flights. Initially, passengers were able to watch only recorded TV programming on the IFE system, but later an adhesiveness was formed with Dish TV to provide live TV in-flight.34 And in a marked departure from tradition, Kingfisher Airlines decided to have an on-screen safety demonstration exploitation the IFE system however the conventional safety briefing by the flight attendants still exists on many flights. King purchase orderThe Frequent-flyer program of Kingfisher Airlines is called the King Club in which members earn King Miles every time they fly with Kingfisher or its partner airlines, hotels, car rental, finance and lifestyle businesses. There are four levels in the scheme Red, Silver, Gold and Platinum levels. Members can redeem points for over a number of schemes. Platinum, Gold and Silver members enjoy access to the Kingfisher Lounge, priority check-in, excess baggage allowance, bonus miles, and 3 Kingfisher First upgrade vouchers for Gold membership. Platinum members get 5 upgrade vouchers. Kingfisher Lou ngeKingfisher Lounges are offered to Kingfisher First passengers, along with King Club Silver and King Club Gold members. Lounges are located in Bangalore external AirportChennai world(prenominal) AirportChhatrapati Shivaji International Airport (Mumbai)Cochin International Airport (Kochi)Indira Gandhi International Airport (Delhi)London Heathrow Airport straighten outaji Subhash Chandra Bose International Airport (Kolkata)Rajiv Gandhi International Airport (Hyderabad)However, note that the airline has suspended operation in London, Kochi, Kolkata and Hyderabad.AWARDS AND ACHIEVEMENTSKingfisher Airlines frequent flyer programme, King Club has won Top Honors at the 21st Annual Freddie Awards in the Japan, Pacific, Asia and Australia region. King Club has won the Freddie Awards 2008 in the following categories go around Bonus Promotion ruff Customer ServiceBest Member Communications (First Runner-up)Best Award Redemption (First Runner-up)Best Elite Level (Second Runner-up)Best Websi te (Second Runner-up)Program of the Year (Second Runner-up)Kingfisher Airlines has received three global awards at the Skytrax World Airline Awards 2010 Named Best Airline In India / Central Asia Best Cabin clump Central Asia. Kingfisher RED named Best Low Cost Airline in India / Central Asia. NDTV win Business Leadership Award for melodic phrase.Indias only 5 Star airline, rated by Skytrax and 6th airline in the world. Rated Indias Second Buzziest stigmatize 2008 by The Brand Reporter. Ranked amongst Indias Top Service Brands of 2008 by Pitch Magazine. Voted as Indias Favorite Airline.Rated as Asia Pacifics Top Airline Brand.Brand Leadership Award.Economic Times Avaya Award 2006 for truth in Customer Responsiveness. Indias No. 1 Airline in customer satisfaction by Business World. Ratedamongst Indias most respected companies by Business World. Rated amongst Indias 25 Innovative Companies by Plan man Media in 2006. The Best Airline and Indias Favorite Carrier in a Survey conduc ted by IMB for The Times of India. Best New Domestic Airline for Excellent Services and Cuisine by Pacific Area Travel Writers joining (PATWA). Service Excellence 2005-2006 for a New Airline by Skytrax.Ranked third in the survey on Indias Most Successful Brand launch of 2005 under the Brand Derby Survey conducted by Business Standard. Busiest Brands of 2005 by agency fans and The Brand Reporter. Rated amongst the Top Ten Internet Advertisers by Yahoo.Rated amongst the top ten in the Best Television Commercial Jingles by NDTV. Best New Airline of the Year Award for 2005 by Centre for Asia Pacific Aviation (CAPA) Award in the Asia-Pacific and Middle East region. Listed in the top 100 most trusted brand in The Brand Trust Report.POLITICAL FACTORS1) turn over sky policy2) FDI limits 100% for Greenfield airports74% for the existing airports100% through special permission49% for airlinesECONOMICAL FACTORS1) Contribution to the Indian economy.2) Rising cost of fuel.3) Investment in the s ector of aviation.4) The growth of the middle income group family affects the aviation sector.SOCIAL FACTORS1) Development of cities leads to better services and airports. 2) Employment opportunities.3) Safety regulations.4) The status attribute attached to a plane travel.TECHNOLOGICAL FACTORS1) The growth of e-commerce and e-ticketing.2) Satellite based navigation system.3) Modernisation and privatisation of the airports.4) Developing green field airports with private sector for example in Bangalore the airport corporation limited. ENVIRONMENTAL FACTORS1) The increase in the global warming.2) The sudden and unexpected behavior of the atmosphere and the dependency on whether. 3) Shortage of the infrastructural substance4) Tourism saturation.LEGAL FACTORS1) FDI limits2) Bilateral treaties3) Airlines acquisitions and the leasing cost.STRENGTHSStrong brand value and reputation in the minds of customers. flavour of the service.Route rationalization.First airline to have a new fleet o f airbuses.Quality and continuous innovation.WEAKNESSESStill a not in profit organization.High ticket price.Facing a tough competition from competitors.OPPORTUNITIESThe expanding tourism industry.The non penetrated domestic market.International market.Untapped air cargo market.THREATSCompetitorsInfrastructure issues.Fuel price hike.Tourism saturationEconomic slowdown.Promotions and sponsorship declining.STP ANALYSISSEGMENTATION geographical RegionDensitySocial ClassesIncome LevelTARGETINGKingfisher Firstcompany executivesKingfisher Classlower middle, upper middle, lower upper segmentPOSITIONINGLifestyleBenefitsQualityPsPRODUCTFleet SizeAircraftsInternational ForayPROMOTIONSAdvertisementsMagazine and Newspaper adsExposure at non-corporate eventParticipation in International Air showsEndorsing celebrities likeKatrina Kaif and Yana GuptaPRICEDynamic pricing model Multiple fare levelsUniform rulesNo hidden restrictions.Pricing model 8 divergent levelsDiscounts provided from time to t imePEOPLEBackbone of the brandExtensive trainingsHospitality industry and consider their customer as guestsInterpersonal skills, aptitude, and service knowledge dwellingOnline Booking www.flykingfisher.comOnline Booking Yatra.com, MakeMyTrip.com, ezeego1.comCredit Cards & Debit Cards PaymentSMS / CallOutlets in every major city and at every airport across the country PHYSICAL EVIDENCEPersonal valetsExclusive lounge spaceHi BlitzGourmet cuisineworld class cabin crew5 trendy video- Fun TV 10 music stations -Kingfisher RadioPROCESSBooking the ticket online booking or tele-booking or from any of the kingfisher outletCOMPETITORSCompanySales(Rs.Million)CurrentPriceChange (%)P/E Ratio marketCap.(Rs.Million)52-WeekHigh/LowJet Airways (I)127768.30305.856.380.0026405.26518/167 change Jet28795.0829.508.660.0014288.3243/15Kingfisher Airlines62333.7912.952.780.008747.0844/13Global Vectra Helico2315.759.70-0.100.00135.8026/9Jagson Airlines97.254.102.500.0082.6910/3MARKET SHAREPROFIT & LOSS re citalMar11Mar10Mar09Mar08Jun0712 Months12 Months12 Months12 Months12 MonthsINCOMESales Turnover6,233.385,067.925,269.171,456.281,800.21Excise concern0.000.000.000.000.00NET SALES6,233.385,067.925,269.171,456.281,800.21Other Income0.000.000.000.000.00TOTAL INCOME6,422.585,140.005,863.601,504.921,830.19EXPENDITUREManufacturing Expenses3,466.832,911.813,715.471,297.511,597.06Material Consumed56.6940.8951.1943.7945.94Personal Expenses680.54689.38825.42244.96247.72Selling Expenses659.07687.02683.8285.0017.90Administrative Expenses426.21418.41546.47110.20154.00Expenses Capitalised0.000.000.000.000.00Provisions Made0.000.000.000.000.00TOTAL EXPENDITURE5,289.344,747.515,822.361,781.462,062.61Operating Profit944.04320.41-553.19-325.17-262.40EBITDA1,133.24392.4941.24-276.54-232.42Depreciation203.02162.80133.2018.2817.67Other Write-offs38.0154.4938.3918.3126.25EBIT892.20175.20-130.35-313.13-276.34Interest2,340.322,245.592,029.33434.44466.05EBT-1,448.12-2,070.39-2,159.68-747.57-742.39Taxes-455 .35-700.00-546.38-494.453.40Profit and Loss for the Year-992.76-1,370.39-1,613.30-253.12-745.79Non Recurring Items-107.62-405.384.4764.98312.12Other Non money Adjustments72.9931.280.00-0.914.09Other Adjustments0.0097.270.000.970.00REPORTED PAT-1,027.40-1,647.22-1,608.83-188.14-419.58KEY ITEMSPreference Dividend0.000.000.000.000.00 equity Dividend0.000.000.000.000.00Equity Dividend (%)0.000.000.000.000.00Shares in Issue (Lakhs)4,977.792,659.092,659.091,357.991,354.70EPS Annualised (Rs)-20.64-61.95-60.50-18.47-30.97CASHFLOW STATEMENTParticularsMar11Mar10Mar09Mar08Jun07Profit Before Tax-1,520.78-2,417.92-2,155.21-682.59-416.18Net notes Flows from Operating Activity-2.23-1,665.09-645.78-541.52-552.58Net Cash Used in Investing Activity38.05235.13206.6313.82119.48Net Cash Used in Financing Activity-81.721,464.55290.11-9.23993.68Net Inc/Dec in Cash and Cash Equivalent-45.9034.60-149.04-536.93560.57Cash and Cash Equivalent Beginning of the Year206.47171.87320.91817.05256.47Cash and Equi valent End of the Year160.57206.47171.87280.12817.05 sense of balance SHEETParticularsMar11Mar10Mar09Mar08Jun07Liabilities12 Months12 Months12 Months12 Months12 MonthsShare Capital1,053.83370.39371.02145.89135.47 militia & Surplus-4,005.02-4,268.84-2,496.3652.99249.23Net Worth-2,951.19-3,898.45-2,125.35198.87384.70Secured Loans5,184.534,842.432,622.52592.38716.71Unsecured Loans1,872.553,080.173,043.04342.00200.00TOTAL LIABILITIES4,105.884,024.153,540.211,133.261,301.41AssetsGross Block2,254.262,048.141,891.80322.33340.77(-) Acc. Depreciation682.37493.62316.2943.5533.74Net Block1,571.891,554.511,575.52278.78307.03Capital Work in Progress.673.35980.601,630.95346.25357.62Investments.0.050.050.050.000.41Inventories187.65164.88147.2548.6461.62Sundry Debtors440.53322.49229.8427.1635.24Cash And Bank252.36206.47171.87280.12817.05Loans And Advances5,380.194,604.313,640.42832.48149.76Total Current Assets6,260.735,298.134,189.371,188.411,063.68Current Liabilities4,463.863,908.033,814.63687.31 449.15Provisions62.1146.7745.559.526.94Total Current Liabilities4,525.973,954.803,860.18696.83456.09NET CURRENT ASSETS1,734.761,343.34329.19491.58607.59Misc. Expenses125.84145.644.5116.6428.75TOTAL ASSETS (A+B+C+D+E)4,105.884,024.153,540.211,133.261,301.41FUTURE STRATEGIESMarket PenetrationCan tie up with Corporate and Government Companies by Providing Unique Travel Solutions for Professional and Personal Use. Can implement programs implemented by South West Airlines to penetrate market. Product DevelopmentSeek additional distribution channels such as more tie ups and Collaboration. Collaboration with international carriers, bilateral discussions over seats and code sharing between the carriers. Market DevelopmentSpecial offerings for first time fliers.Try to find out new customer group such as old-retired persons. DiversificationCan enter into other Transport Services like Bus Services between major(ip) Cities and Other Services.PROBLEM IDENTIFICATIONCurrent Indian scenario Air tr avelFor majority of people preference-No frills low cost airlines Kingfisher competing with both the no frills low cost airlines as well as those with frills. Three unique classes of service Kingfisher First (Business class)Kingfisher Class (Premium economy)Kingfisher Red (Low fare)Current segmentation based on social class & income levelSocial classes which use full carrier services and those which use first class services of the railways Income level Low cost carrier for those who travel by first class railwayProblem with positioningBrand relates to LifestyleRECOMMENDATIONSNeeds to change brand perceptionCurrently perceived as Lifestyle sloganRed color of crew Reflects RoyaltyOver dependence on brand image of Mr. MallayaJet airways Reflects professionalismAdvertisement reflecting Value for fundsGain operational efficiencies through alliances as with Jet Airways LeverageUponNew fleet, Unmatched flight serviceInnovative ideas-LIVE TV with 16 channelsAir Boutique, in Kingfisher AirlinesA joint promotion, i.e. using MakeMyTrip services and flying Kingfisher Airlines. By partnering with Kingfisher Airlines, further convenience in travel is offered at no extra cost- Added value Fleet size expansionSUGGESTIONReduce the labor costSimplify the flight operationsOffer more transparent pricing jerk off smart on fuelThe process of acquiring spice jet if complete would make kingfisher the largest player in the aviation industry Different modes of pricing should be taken care of.CONCLUSIONAfter doing a study of this project representing on Kingfisher Airlines, I have come to a conclusion that Kingfisher Airlines is one of the largest and most widespread airlines of the country providing its services not only in India as well as outside India also. It has alliance with many other airlines in this sector.Kingfisher Airlines offers world class services to the customer at a nominal rate. The national carrier takes immense pride in having successfully played a pivotal role in making various facets of India popular with the people of the world and acting as the countrys cultural ambassador. The airline uses the services of one of the advanced plans been operated in the world. To sum up I would like to say that Kingfisher Airlines is serving its customer in an appreciated way and going to be in the list of best services providers in coming years.