KINGFISHER AIRLINES LTD.

Submitted by:Section F-Group 1Ananya Mukherjee(PGP/17/308)Ankit Goel(PGP/17/309)Harsheen Jammu(PGP/17/321)Parul Singh(PGP/17/331)Prakhar Garg(PGP/17/333)Surbhi Paliwal(PGP/17/350) Case Facts1) Established in 2003, and promoted by Bengaluru based United Breweries Group 2) Chairman- Mr. Vijay Mallya3)9 may 2005- Started commercial operations with a fleet of four Airbuses A320-200S4) Kingfisher airlines known as the only five star airlines in Indian skies5) Two subsidiaries: Northway aviations and Vitae India SpiritsVision To deliver a safe, value based and enjoyable travel experience to all their guestsMission Be the most successful full service ,true value airline operating in India Creating a following of fans and not just loyalists Drive not just loyalists Addiction to Kingfisher To be the market leader by 2010Strategy Provide superior experience in air travel through a five element through a high seat pitch , personalized entertainment, hot meals, home delivery of tickets ,valet service ,treating travellers as guests not passengers. To use standard Airbus A320 Aircrafts to reduce operational costs before acquisition of Air-Deccan Focus on increasing market shareStrategic Fit Competition was becoming intense with a large number of new entrants Carriers like Indigo , Spicejet and GoAir retained their LCC business model To maintain a fit between internal and external environment it looked for ways to expand in an inorganic mannerProblems faced by Kingfisher Airlines No bargaining power over suppliers as all the aircrafts were dry leased Failure to manage Operational Strategic and Financial Risk

Limited organic growth opportunities due to congested airport infrastructure Intense competition by new entrants Could not expand internationally due to government restrictions Increase in operating costs due to duplicity of tasks post-merger(two different aircrafts) Marketing issues-Price war with LCC, long gestation period in airline business, Compromised image Cash Flow problems due to rising fuel costs Increasing Dues- debt servicing costs more than value of market capitalisation

Steps that could be taken Acquiring Air Deccan was not consistent with mission and vision of Kingfisher Airlines which aimed at providing high quality service To increase market share other acquisition targets should have been looked upon Focus on increasing margins. Increase in market share should not be at the cost of decreasing margins. Selling a substantial stake to a foreign airline to infuse much needed cash