Value proposition for

Kingfisher Airlines..

INTRODUCTION TO THE CASESTUDY The Indian aviation industry is one of the

fastest growing industry in the world. Private airlines account for 80% of the sector of domestic aviation market. Indian aviation sector is poised to become one of the top five civil aviation markets in the world over next five years. India ranks ninth in the global civil aviation market.

ABOUT THE TREND The aviation industry is growing at an annual growth rate of 18%. The average load factor for all domestic airlines stood 75% for the period starting from Jan 2010 to Aug 2010. The combined market share of independent LCC’s is over 35% while full service carriers now deploy almost 70-80% of their domestic capacity under LCC brands such as JET KONNECT and KINGFISHER RED.

BACKGROUND OF KINGFISHER AIRLINES Kingfisher Airlines commenced operations as

on 9th May 2005. Kingfisher offers over 350 flights daily, connecting 68 key Indian and International destinations. KINGFISHER AL IS ONE OF THE SIX AIRLINES IN THE WORLD TO HAVE A FIVE STAR RATING FROM SKYTRAX AND THE ONLY AIRLINE IN INDIA THAT HAS IT. Kingfisher Airlines operates three classes of service i.e. FIRST, CLASS AND RED. First and class flights- Kingfisher Airlines offers world class in flight entertainment, extra wide seats, spacious leg room and large overhead storage space,international class cabin crew, well appointed interiors on board and lemonade and three course gourmet cuisine.

RED- Kingfisher airlines is first airlines to provide in- flight entertainment in domestic flights. Bottled drinking water and cineblitz magazine.Kingfisher RED has redefined low fare flying in India . On board kingfisher red guests get complimentary hot and filling food. Guests can earn miles (KING CLUB- LOYALTY PROGRAMME) as they fly and these miles can be redeemed for free tickets. Kingfisher airlines have an extensive on ground experience program for communicating five star experience and they also provide valet service. .

THREE CHEERS FOR KINGFISHER AIRLINES.. HIP HIP HURRAY!!!!! 21ST NOV 2005 Kingfisher Airlines orders 30 new Airbus A320 family jets worth US$1.9 Billion. ( DURING THE START OF AIRLINES) MAY 2009Kingfisher airlines acquired 1st highest market share within few years of its commencement. 19TH DEC 2007 Kingfisher airlines merged with Air Deccan and launched a LOW COST CARRIER as KINGFISHER RED which provided meals and bottled drinking water to all its passengers, the only LCC doing that. Kingfisher airlines became the passenger favorite airline as it became known for its EXPERIENCE FLYING.Success story of Kingfisher airlines….. Read for yourself.. …

I'd like to be adopted please.  (DECEMBER 2008)

I had a choice of airline from London to Bangalore - BA or Kingfisher - flight times were better on BA, but the thought of a few more inches of legroom with Kingfisher were just calling me loudly. So Kingfisher it was. Flight booked. So, I was very happy. Hurray. No more fighting for a seat, an overpriced drink, and then joining a queue to sit in (admittedly 34 inches) of seat pitch (comfort) cattle class for 10 hours.

It was an amazing experience. From the greeting as you get on the plane , the acres and acres of space, three windows in my "suite", that's right I had three windows! An amazing toiletry pack, with a wooden handbag sized hairbrush, smellies from Salvatore Ferragamo, a sleep suit, slippers, papers, magazines, hot towels, man alive where am I going to put all this stuff? Then Vijay, or do you want me to start calling you Pops already?, appears on the screen - the 17inch screen and tells me that he's personally selected all the crew on board, and he's told them to treat me as if I were a guest in his home. Dr Mallya, after the Kingfisher First experience, I'm not sure just visiting is going to be enough for me. As my subject says, I think I'd like to be adopted.

I've been wracking my brains as to what wowed me the most - well it started

With the onboard camera, that appears to be attached to the underside of the plane, so I could watch the runway from the bottom of the plane as we taxied, then watch London as we took off, and then southern England we flew over, then Europe. Clearly I'm easily pleased. But seriously, what wowed me the most? - there's no one thing, but there were plenty of them - it started with the offer of champagne.-Dom Perignon no less, and yes I would like to drink my champagne in the bar - and yes I sat on the funky cream leather sofa watching Europe scoot past as I lived the high life and ordered my dinner. After retiring to my suite, dinner was served. Oh boy a fabulous vegetable thali - served on a beaten silver platter. (wow, amazing food and superb presentation). My fully flat bed was obviously prepared for me - and then the stars came out. Literally, the ceiling goes a midnight blue colour and stars appear, so I'm not only in heaven, I can see it as well.

Waking to breakfast and coffee served from silver jugs , there was just enough time to move my chair into every position possible, test out the massage options on it, it was amazing and then we were in Bangalore. And of course I love being first off the plane, and seeing my bag the second one out Kingfisher - you did me proud, it was an amazing experience, I fear you've spoiled me for

I'm sorry I ever doubted you - for me it was great, your support staff were fabulous, explained everything in great detail, your emails were timely, informative. And of course, the last word must go to Dr Mallya. Sir, you have done a grand job. And should you ever feel the need to adopt me, then my mother would understand.Ms. Sarah Carter.

life.

BUT THE BILLIONAIRE MR MALLYA WASN’T

THAT LUCKY…

A MAN CARRYING LARGER THAN LIFE

IMAGE TASTED LIFE IN REAL SENSE..!!!!!!

Sometimes destiny hits you hard on the head and the going gets tough. Vijay Mallya’s philosophy of larger than life image has left him in blunder. A total debt of around Rs 5500 crore has forced him to send KINGFISHER RED to a death sentence.

NOTHING IS PERMANENT, IF HANDLED UNREALISTICALLY!!!!

?????..

Vijay mallya said, “Will soon stop the operations of Kingfisher Red as he did not believe in low cost operations any longer.”

TUMBLING MARKET SHARE

2007- Mid 2011

1) KINGFISHER AIRLINES

2) JET AIRWAYS3) AIR INDIA4) INDIGO5) SPICE JET6) GO AIR

Current

1) JET AIRWAYS2) AIR INDIA3) INDIGO4) SPICE JET5) KINGFISHER

AIRLINES6) GO AIR

CONTINUOUS LOSSES TOOK A TOLL ON QUALITY OF THE AIRLINE.Some of the customer reviews:1) Hong Kong to Delhi. Check-in staff were rude and

ignorant, we were left at the service desks for almost 30 mins unattended. The in-flight entertainment did not work for the middle of the cabin. The toilets were not kept clean. We were travelling with a 10 month infant and there was no bassinet or seatbelt provided. Seats were uncomfortable and 5 out of the 6 seats we booked had some type of fault in it (cup holder broken, remote broken etc).

2) First Class from Delhi to London. At Delhi airport the lounge was a building site with drilling, hammering and intolerable noise. Staff were wiping dust from bottles. We asked to use a different lounge, the staff ran around for about half an hour, to no avail, whilst we waited at the entrance. Onboard the

advertised champagne had not been loaded, "catering issues", food was canteen style, the cabin was shabby with bare patches on the upholstery and dirty. The entertainment system on 2 of the seats did not work so I moved 3 times. Not 1st class in any shape or form.

All in all we made a bad choice flying this airline. 4) Kingfisher airlines just hype.

5) Flying kingfisher domestically was a single star experience and not five star as advertised.

6) Not the king of good times.

THE PROBLEM TURNS OUT TO BE WORST. .. …!!!!

HINDUSTAN TIMES,2012 February 23rd

Kingfisher airlines continues to cancel flights for the fifth consecutive day. 30 bank accounts freezed by service tax dept, 40 pilots resign kingfisher airlines.The staff salary outstanding from past 3 months.I don't think it's an option to just give up and exit and close down. I don't think it will happen. I don't think the government wants it either," Mr Mallya said, in his first public reaction to the latest crisis that has gripped his cash-strapped airline.

VISION: The KFA family will continually deliver a safe, value based and enjoyable travel experience to all its guests.MISSION: To make kingfisher airlines the best in the world.

SWOT ANALYSIS OF KINGFISHER AIRLINES

S- Only LCC providing meals onboard.

W- 1) High debt. 2) Diluting reputation and fear of closure.

O- Middle class segment opting for flights.

T- 1) Hiking fuel price. 2) Competition. 3) Bullet train to be introduced. 4) Taxation policy of government.

ACTUAL SOLUTION

POSITIONING1)Five star experience of flying

SEGMENTATION1) For FIRST AND CLASS- Combination of

demographic and psychographic2) For RED – Cost conscious passengers

TARGET CLASS1) For FIRST AND CLASS – Affluent class people 2) For RED- Middle Class people

CURRENT VALUE PROPOSITION OF

KINGFISHER AIRLINES1) Various in-flight entertainment options, KA is the only airlines providing in-flight entertainment in domestic flights.

2) Designer aircrafts giving extra legroom

3) Pampering the passengers with quality service and extra helpful staff and cabin crew.

4) The LCC cost lower than the economy section cost of other competitor airlines.

5) On ground valet service for baggage handling and assistance.

6) Various entertainment options on airport itself.

7) Loyal passengers, FLYERS CLUB, whose points can be redeemed for free air tickets.

SUGGESTED VALUE PROPOSITION FOR

KINGFISHER AIRLINESBACKGROUND:Currently as Kingfisher airlines is passing through heavy financial crisis which has resultantly taken a toll on its quality and which has indirectly resulted in less passengers opting for it, this is the best time for Jet airways as it has hit back and acquired the maximum market share which it had lost to Kingfisher airlines due to traditional ways of providing service.

TO REGAIN ITS FORMER POSITION KINGFISHER AIRLINES CAN TAKE

FOLLOWING STEPS:

1) Repositioning: The current Kingfisher airlines positioning strategy is FIVE STAR EXPERIENCE OF FLYING. This strategy is not working anymore as due to Kingfisher’s quality decline the customers believe that the strategy is just a hype. Kingfisher airlines should reposition while keeping in mind, customer believe what they experience.

2) Hard core advertising: Kingfisher airlines should advertise hard through mass media and showcase an attitude of “ THIS TIME WITH THE ORIGINAL KINGFISHER QUALITY AND STYLE…” Advertise in multiplexes, National and international magazines . The advertisement should be made in such a way that will touch the emotional chords of

3) Provide snacks instead of meal in domestic airlines.

4) Provide bottled drinking water instead of lemonade in FIRST and CLASS sections of Kingfisher airlines.

5) Provide compulsory valet service to senior citizens, passenger with patients or patients(itself) and handicaps only. Withdraw valet service to young and middle aged passengers and if any passenger wants it, charge for it.

6) Provide FAMILY OFFERS on fares during the vacation times that is during Diwali , Christmas and new year. This will attract more and more passengers with family and will increase the load factor of the airlines during vacation time.

the lost passengers. This will definitely help in regaining lost passengers and market share. ( The same strategy that was adopted by Cadbury when its pune unit was closed due to positive report on insect found in chocolate.)

7) Provide Comic books and General knowledge books to kids. Provide kingfisher scholarship via lucky draw to kids of the families travelling through KA

8) Provide recipe and beauty tips books to female passengers in LCC.

9) Provide a detailed map of the country where the plane is heading.

10)Celebrate passenger birthday, anniversary on board by presenting them a surprise gift.

11)Withdraw providing CINEBLITZ magazine in domestic flights of less than 1 hr, instead provide newspapers.

THE VALUE PROPOSITION SUGGESTED FOCUSES ON CUTTING COSTS ALONG WITH KEEPING THE PREMIUM IMAGE OF THE AIRLINES INTACT.

FOLLOWING THE SUGGESTED VALUE PROPOSITION MAY HELP THE KFA AIRLINES IN ACQUIRING THEIR FORMER FIRST POSITION.

THANK YOU!!!

Mahwish Khatib