what happened to Kingfisher, main factors

1. Case study : Cloudburst of Kingfisher
Airlines

2.  Kingfisher airlines started in 2003
 Indians were expecting international flight
standards, hospitality , so KF started as a
premier airlines initially
 Later focused on Low Cost Airline services
 In 2008 he acquired Air Deccan and started
international air services

3.  Frequent changes on Focus
 Acquisition for expansion
 High operational cost
 Lack of management
 Economic slow down

4.  After acquiring Air Deccan they suddenly shifted
focus on LOW COST AIR TRAVELLING
 Frequent changes in the hospitality and aircraft
ambience made travelers lose their interest in the
brand
 Air Deccan & KF Aircrafts use to run at the same
time and there was no proper syndication
 They treated Air Deccan as a step child , not for the

5.  KF Airlines acquired Air Deccan for the sake of
international route license , i.e. as per international
airline policy , any airlines should’ve min 5 Yrs of
domestic experience to get international route
license
 Without getting stable in domestic market they
jumped into international routes where competition is
at peaks

6.  As we all know Operational costs of the airline industry are
very high compare to any industry
 Operational costs such as :
 fees for landing and parking
 Fuel cost
 Taxes for Govt.
 Licenses for the routes
 Aircraft maintenance
 Salaries for the employees

7.  There was no single CEO continued for 1 Yr in KF
airlines and there was always frequent change in top
management
 The company not even thought of making
Mr.Gopinath(Ex-Founder of AIR DECCAN) as CEO
for KF airlines to bring the company into profits

8.  The main external factor for KF Airlines is Economic
slowdown in 2008 i.e. KF first started its
international route from Bangalore to London in 2008
and in the same year recession affected the whole
world which indirectly affected the air travel
occupancy in international routes
 Due to recession airplane fuel prices raised, airport
charges for landing became very costly in
international airports around the world

9.  Mallya entered the business for the glamour it
brought to his portfolio
 He wanted to be India’s Richard Branson forgetting
that success cannot be copied and he tried running
airline like the liquor business was his main fault
 He failed to understand the difference between
running a business with 25% -35% margins and one
with 1%-2% margins or even losses for the long
period of time

10.  In India we have seen at least 10 failures in aviation
since 1990’s but Mallya did not seem to have noticed
any of these and he assumed that since he was so
successful in liquor the airline business should be a
breeze
 When FDI was opened up , it was the most viable of
business that would get investment but KF Airlines
failed in finding white knight

11.  In business you can succeed by doing one of two
things:
 Avoid putting all your eggs in one basket( and so
spread the risk)
 You can put all in one basket (focus on one business
and stick to your core competence)
 Mallya did neither of the above instead he put all his
eggs on flight to disaster including his share holdings

12. Gracias