...The name Kingfisher is a household name in India, it’s a refreshing beer and we can call it the Budweiser of India. Making some good profits in the brewery Industry, the CEO, Vijay Mallya ventured into the Airline Industry and launched Kingfisher Airlines commencing operations in 2005. Ever since that company has been running on a loss and right now, it’s almost in bankruptcy. Exhibit 1: Profit/Loss: Courtesy Wikipedia, Numbers in Indian Rupees (X 10 million), EPS in Rs A lot of things have gone wrong with the operations of this airline which has resulted in a big crisis for all its stake holders, not limited to its employees, its lenders, airline partners, stock holders and its flight leasers. Kingfisher Airlines has more than 80000 Million Rs in debt with very little cashflow. So what went wrong? 1) Addressed the wrong market initially? It targeted the business class initially with fewer economy seats in its planes. Result: Empty business class seats and mounting losses. Under current economic conditions in India, there was more demand for economy coaches and lower cost airline tickets. He failed to understand the mentality of the mass. 2) Acquiring Air Deccan: In order to rectify its position, king fisher acquired a low cost/profitable economy carrier named Air Deccan and re-launched it as Kingfisher Red. This acquisition came at a heavy cost and besides, the CEO of Air Deccan Lt Gopi was set aside and the operating principles/philosophies were...
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...CASE STUDY Brand Kingfisher : Creating a Lifestyle Brand -- Lekha Ravi Team Leader, The Icfai Research Center, Chennai. The author can be reached at lkhravi@yahoo.co.in The United Breweries (UB) group today (2008) boasts a diverse portfolio of businesses - alcoholic beverages, life-sciences, engineering, aviation, agriculture, chemicals, information technology and leisure. The man behind this potent diversity is none other than India's flamboyant tycoon Vijay Mallya (Mallya). Mallya's association with the rich, trendy and the luxurious seems to have rubbed off on his brands. All through his glitzy forays into various fields, Mallya has fastidiously endorsed Brand `Kingfisher'. His entry into aviation with the glamorous launch of Kingfisher Airlines drew a lot of its brand equity from Mallya himself. Media reports often analyze how Mallya promotes the `Kingfisher' brand by associating it with lifestyle events like horse-racing, Formula 1 racing and prestigious launches. Reflecting on how he contributes enormously to it through his own flamboyant lifestyle, it is pertinent to probe into the prospects of Kingfisher's brand extension. The Kingfisher brand has come to epitomize a lifestyle that encompasses some of the finest things in life and is today synonymous with delivering a premium experience. - Vijay Mallya Brand Kingfisher I am the brand ambassador; I am the `King of Good Times',said Mallya, the brainchild of Kingfisher brand launched in the year 1980. Reports say...
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...Kingfisher Airlines Limited Case Kingfisher Airlines Limited is an airline based in Bangalore, India. It is a major Indian airline operating 218 flights a day and has an extensive network to 37 destinations, with plans for regional and long-haul international services. Its main bases are Bangalore International Airport, Bangalore, Chhatrapati Shivaji International Airport, Mumbai and Indira Gandhi International Airport, Delhi. Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary market. Kingfisher is one of only 6 airlines in the world to have a 5 star rating from Skytrax, along with Asiana Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Cathay Pacific Airways. 3. Situational Analysis i. Steeple analysis Sociological Today’s air traveler is like any other consumer looking for value for money. Disposable incomes are on the rise and the consumer is willing to spend more for quality and brands. Air travel is no more about transporting passengers. It is more about the flying experience. People like travelling in planes. ‘Kingfisher airlines’ has a very good social image. Being a five star airlines, customers want to travel with Kingfisher. Also, the brand charges a premium price that is why only upper Socio Economic Class people prefer Kingfisher airlines. The lifestyle of the people is improving....
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...Assignment : 2013 Strategy Formulation : “Kingfisher Airline” “Strategies adopted by Kingfisher airlines & causes of its Failure” Submitted by : Japkirat Singh Oberai Submitted to : Dr. Supriti Mishra Contents 1) [ ABSTRACT ] 2) [ INTRODUCTION ] 3) [ HISTORY ] 4) [ STARTING OF THE CRISES ] 5) [ DEBT RESTRUCTURING ] 6) [ CRISIS TILL CONTINUE ] 7) [ FUEL DUES ] a. HPCL: In Jul 2011, Hindustan Petroleum 8) [ AIRCRAFT LEASE RENTAL DUES ] 9) [ AAI REPORTS ] 10) [ THE CRISIS CONTINUE ] 11) [ FROZEN BANK ACCOUNTS ] 12) [ IATA SUSPENSION ] 13) [ SWOT ANALYSIS ] b. [ KINGFISHER’S STRENGTHS ] c. [ KINGFISHER’S WEAKNESSES ] d. [ KINGFISHER’S OPPORTUNITIES ] e. [ KINGFISHER’S THREATS ] 14) [ PEST ANALYSIS ] f. [ Political Factors ] g. [ Social Factors ] h. [ Technological Factors ] i. [ Economical Factors ] 15) [ STRATEGIC PARTNERS ] 16) [ Strategy’s of Kingfisher Airlines ] j. [ Functional strategies ] k. KFA’s Promotional Strategies & Marketing Strategies l. [ Financial strategies: ] m. [ Expansion strategy ] n. [ Human Resource Strategies ] 17) [ UNCERTAINTY AHEAD ] Kingfisher Airlines – has a paradoxical situation faced by the airline industry in India which experienced exponential growth in passenger volumes; but with the exception of IndiGo Airlines, all the airlines failed...
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...The financial agonies for Kingfisher Airlines (KFA) are seeming to become insurmountable. After being forced to massively scale down its operations and ground more than half of its fleet in the month of Feb 2012 when the IT-Dept froze its bank accounts over non-payment of tax dues, the estranged airliner has now cancelled all of its international operations and has the aviation regulator (DGCA) as well as the govt. breathing down its throat questioning the company’s ability to come up with a credible plan and revive the failing fortunes. The cash-strapped airlines may need Rs 3000-4000 crore to get itself back on its feet. The airline is burning cash at a rapid rate and it is no wonder that they are asking banks for additional working capital. Approximately 23% of the company is now owned by the banks that are already on the hook for approximately Rs 5,000 to Rs 6,000 crore of debt. They haven’t been paying their creditors for quite some time now. In the absence of additional capital coming into the company, Kingfisher has had no choice but to cut down on the operations, which is not a good sign because if you cut down on operations it will only cause further problems – they need to be in operation to repay their liabilities. All this is further putting pressure indirectly on the creditors to restructure the terms. So dire are Kingfisher’s circumstances that it recently bounced a $3m cheque to the Airports Authority of India, to which it owes around $40m in fees. Recently...
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...KINGFISHER CRISIS AND ITS CAUSES THE CRISIS Warren Buffet once wrote, “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.” (Kaul V, 2012) – This statement is epitomized by the case of the Kingfisher airlines. Ever since it commenced operations in 2005, the airline has never posted any profits, despite having been endowed with huge amounts of capital. Its losses and debts are aggravating and accumulating with each passing year. For the many banks including SBI that borrowed huge amounts of money to this loss making enterprise, Kingfisher has now been recorded as a non performing asset (NPA). Kingfisher entered its worst ever crisis since October last year - By early 2012, the crisis had got so bad that the airline accumulated total losses of over $ 1.27 billion. Moreover, the market share of Kingfisher airlines in the Indian aviation sector fell drastically – while it boasted of having the second largest market share in October last year, its market share has now fallen to the lowest of any Indian airline in April. To make things worse, the airline has had to cut the number of its flights to about 120 a day, down from about 340 daily flights. (Hatif T, 2012; Parija P, 2012 ). There were a large number of flight cancellations too. In addition, in May 2012, the Indian aviation director even threatened Kingfisher that it would lose its flying slots if it did not pay the income tax of Rs...
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...17-10-2015 ORGANIZATIONAL BEHAVIOUR-II Session:2 KINGFISHER AIRLINES MANAGING MULTIPLE STAKEHOLDERS Anisha Goyal 19/246 B Abhishek Sharma 19/249 Madhu Garg 19/267 Sudhina Abraham 19/289 Varsha Murali 19/296 Vinita Chauhan 19/298 1. To what extent can the problems of Kingfisher Airlines be attributed to management of its stakeholders? All the critical problems faced by Kingfisher airlines can be traced back to mismanagement of stakeholders and their interest: CUSTOMERS • Removal of entertainment center from flights which was Kingfisher airlines unique selling point SUPPLIERS • Defaulted on supplier payments EMPLOYEES • No salary for three months SOCIETY • Started cannibalizing components and parts from the grounded aircraft which was a safety concern OWNERS/INVESTORS • 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. These bad strategic decisions eventually led to default of loan repayments. Owing to the same reasons shareholders also lost their money 1 17-10-2015 2. Which of the stakeholders were engaged more than others, whose interests seemed to be guarded and whose ignored? • • • • The company focused only on the costumers by providing high quality services and kept neglecting other stakeholders, which eventually led to bankruptcy. Things like high-end flight furniture, TV...
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...KINGFISHER AIRLINES: MANAGING MULTIPLE STAKEHOLDERS The entire airline industry in India came under close scrutiny after Kingfisher Airlines, already known to be in deep trouble with a variety of stakeholders, cancelled about 35 flights, one day in November 2011. Many passengers had harrowing experiences of being stranded at odd locations, making alternate arrangements to travel, and rescheduling important engagements owing to the travel disruptions. Most of them, many very loyal customers of Kingfisher, were distressed with the cancellations, and were even more distraught when other airlines raised fares. Many of them contemplated switching their future travel programs to other airlines. Several others not directly affected by the sudden events wondered whether they would ever book flights with Kingfisher Airlines in the future. Owing to the furor these cancellations created, the Directorate General of Civil Aviation (DGCA) sought explanations from the Kingfisher management. To prevent the crisis from affecting the whole airline industry, the Minister of Civil Aviation had to step in to assure everyone that it was a crisis that would blow over, and even the Prime Minister was forced to make a statement that the government would look for ways to help the airline deal with its existing challenges. On November 15, 2011, Vijay Mallya, Chairman and Sanjay Aggarwal, Chief Executive Office of Kingfisher Airlines addressed a press conference at Mumbai’s Hyatt Regency to explain the...
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...Kingfisher Patisseries Goes International Kingfisher Patisseries is a small business run by Patrick Stanthorpe and his wife in a regional city of Victoria, Australia. The business employs less than 20 people and is typical of most small micro‐businesses which are time and resource poor. Kingfisher’s decision making and planning processes are informal, unsophisticated and reactive as might be expected with small owner‐managed firms. Kingfisher competes in the premium quality dessert segment of the Australian food service and hospitality industry and holds about 10% of that segment valued at AUD 15 million. Kingfisher offers a wide range of frozen dessert lines: cheesecakes, gateaux, roulades, pies and strudels made from high quality natural ingredients to organisational buyers, which include larger restaurants, clubs, large scale professional caterers, first class hotels (4 to 5 stars), domestic and international airlines, either directly or via a network of food wholesalers. Since its inception some three years ago, Patrick has expanded Kingfisher’s geographic scope by building a national network of agents and presently covers most Australian capital cities with limited distribution within rural Australia, except in its home State of Victoria. He is now considering overseas expansion as a result of receiving an unsolicited enquiry from a Japanese company, called Denzo Gato. However, prior to this enquiry Patrick dismissed other expressions of interest from ...
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...decades, starting with 5 breweries in South India in 1915. The popularity of their beers soon spread and within a short time, bullock carts carrying huge 'hogsheads' of Kingfisher became a familiar sight in Madras, the Nilgiris and Bangalore, the headquarters of United Breweries Ltd. Almost immediately, the brew from UB became a favourite, especially with the British troops. So began the history of Beer in India... From bullock cart-loaded barrels or 'hogheads' of frothing ale, the beer business has gone on to become the undisputed 'king' in the Indian beer market. UBL today boasts an impressive spread of own and contract manufacturing facilities throughout the country. Here, innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other. Kingfisher, the flagship brand of United Breweries and the best-selling Indian Lager worldwide, is now available in over 55 countries and is exported from the UK to 19 Continental European Markets and Canada and from India to major markets in the Middle East, South East Asia, the Far East and Australasia, and it is also served on board 10 international airlines. Kingfisher was first imported to the UK and USA markets in the years 1982 and 1983 respectively in the traditional large 650ml bottles. It rapidly gained a foothold in the fast expanding...
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...Kingfisher Airlines update” October 2008 Agenda • • • • • UB Group: The growth story (slide 3) Airline Industry Overview (slide 9) Kingfisher Airlines Overview (slide 18) KFA Financials (slide 25) KFA Outlook (slide 31) 2 31st October 2008 UB Group: Growth Story 3 UB Group’s growth story SUCCESS MANTRAS • • India’s Leading branded consumer group Has dominated domestic market − Accelerated organic growth − Acquisitions • • Is Globally Competitive Has set standards of governance and transparency 4 31st October 2008 No. 1 Beer in India No. 1 Spirits in India No. 1 Airline in India What next? Merged Hebertsons into MCD Kept acquiring smaller players in beer and liquor industry. Brought in Scottish New Castle Market gave thumbs up as Margins doubled to 18% because of synergies Acquired 100% stake in Whyte and Mackay, worlds 4th largest scotch company Acquired further 20% stake in Deccan Aviation through open offer KFA merged in DAL and the merged entity renamed as Kingfisher Airlines Limited UB Group 2002 TIMELINE 2003 2005 2007 2007 2008 Bought Gilbey Green lablel BUILT BRANDS LIKE KINGFISHER, BAGPIPER, BLACK DOG … Acquired Shaw Wallace & Co Ltd Consolidated Beer business under UBL and liquor business under USL Acquired 26% in Deccan Aviation- Announced merger of KFA with Deccan,; Acquired further 3% stake in Deccan Aviation to increase the holding to about 50% Announced...
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...Shares of Deccan Aviation [ Get Quote ] have doubled in a little over a month in anticipation of a reverse merger of Kingfisher Airlines [ Images ] into Deccan Aviation. Deccan shares climbed to a 52-week high of Rs 335 in intra-day trade on Wednesday, before closing at Rs 295. Strangely, a day after Vijay Mallya [ Images ] announced his plan to merge Kingfisher into Deccan, the budget carrier's stock fell more than six per cent to Rs 277, even as the BSE Sensex gained 70.61 points. Airline experts say Mallya has a tough job on his hands. "I don't know if this would work. Mixing everything in one company doesn't work. It will have a full-service airline, a no-frills airline, plus international operations under one umbrella,'' said an airline expert and investor. History is not on Mallya's side. Full-service carriers and low-cost carriers (LCC) belong to separate worlds, and their DNAs seldom match. Whenever they have tried to merge or work together under one umbrella, they have nearly failed. It happened when British Airways tied up with budget carrier Go, and when Delta Air acquired budget carrier Song. This, despite the fact that these were subsidiaries, whose operations were independently managed. ''Analysts and investors are paranoid about the features of the LCC model. They don't like even the smallest deviation,'' said a former airline executive who requested anonymity, as he was employed by one of the two airlines. In fact, when Deccan planned an inflight...
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...KINGFISHER AIRLINES (BSE: KFA.BO) EQUITY RESEARCH Investment Analysis Project (BEAM048) Module Coordinator: Mr. Jamie Stephenson Project Supervisor: Mr. Stanley Gyoshev Candidate Number: 005293 Student ID No. 600050722 Word count: 5806* *excludes tables, figures, appendices TABLE OF CONTENTS Executive Summary 5 1. Company Overview 6 A. Branding and Strategy 6 B. Recent Developments 7 2. Industry Review 8 A. Global Sector Overview 8 B. Aviation in India 9 a. Political Factors 9 Opportunities: 9 1. Foreign Direct Investment: 9 2. Infrastructure: 9 3. Debt Restructuring: 9 Threats: 10 1. Freedoms of Air agreements: 10 2. Ground handling Policy: 10 3. Spot Price Controls 10 4. World Politics: 10 b. Economic Factors 11 Opportunities: 11 1. GDP Growth: 11 2. Domestic Consumption and Per Capita Income: 12 Threats: 12 1. Global Recession: 12 2. Oil Prices: 13 3. Inflation: 13 c. Social Factors 14 Opportunities: 14 1. Per Capita Penetration 14 2. Demographics: Growing Middle Class and Urbanization 14 Threats: 15 1. Price Sensitivity: 15 d. Technological Factors 15 1. GAGAN – GPS Aided Geo Augmented Navigation 15 2. Google ITA Deal 15 3. Social Networking Sites 15 e. Legal Factors 16 1. Pilot Licenses 16 f. Environmental Factors 16 1. Geography 16 2. Carbon Foot Print 16 g. Security 16 3. Company Analysis 17 A. Revenues 17 B. Costs 18 C. Fleet Strategy:...
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...This is a business ethics case analysis on “Kingfisher Airlines” narrated by Abhay K Ojha. The case analysis revolves around the effect on the various stakeholders due to 35 cancellations made by the Airlines on one day in November 2011. The case analyzes the various facts and situation given in the case to decipher the moral of decision-making using the seven steps Process Model. What is the moral Issue and Key Choice to be made • Moral Issue The Integrity of a well-known luxury airline called Kingfisher was at stake when the company cancelled a number of its flights on a single day. The Chairman/owner Vijay Mallay of the company in a press conference addressed the media by lying to the employees, customers and the government that the cancellations were planned for a short period and did not anticipate the issue. One of the top officials blamed the cancellations due to sudden resignation of the pilots, which was also a lie as the company, had been facing financial crisis for some time and were not paying their employees. The airline industry was unable to pay employee salaries for some time which is unethical and lack of discipline. This attributed to resignations from the staff including pilots for some time and was not sudden as claimed by the company executives. Instead of addressing the harm caused by the situation and creating a sense of responsibility, the owners tried to blame it to other facts. A moral dimension is to address the harm, which creates a sense of...
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...ORGANISATIONS- THEORY AND PRACTICE PROJECT – WORKSHEET 1 group- L2 Name of the Adopted Company : United Spirits Limited The business the company is into: United Spirits Limited is the largest spirits company in the world by volume. United Spirits Limited (USL) is involved in the production, distribution and sale of alcohol beverages across different regions in India. It is also involved in the exports of alcohol beverages to over 37 countries thus enjoying a global footprint as well. Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 22 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market share for its first line brands in India. Its brands include Dalmore, Black Dog Reserve Scotch Whisky(Scotch); Antiquity Blue, Signature(Indian whisky); Honey Bee(Brandy); Blue Ribbon( Gin); Romanov(vodka)etc. A brief introduction to the History of the company: The company was established in 1826 by McDowell & Co as a trading company with its headquarters in Madras, by an enterprising Scotsman Angus McDowell. McDowell’s rapidly became the preferred purveyors of fine imported liquors and cigars that gratified the rich souls in the British India. In 1951, Vittal Mallya acquired McDowell’s initiating a new era in the history of the company. Its first distillery was established in Cherthala in 1959 in Kerala and began bottling brandy. Its first product was launched in 1962 which...
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