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Crisis of Kingfisher Airlines Essay

Overview of Kingfisher Airlines

Kingfisher Airlines, one of the three existing major air hoses in India, was founded fourteen years ago and was the first airline in the Indian market that secured premium flights for passengers on domestic routes for relatively low prices. In a few years after its establishment, the air hose became the largest domestic airline company with a wide option of both regional and international destinations. To be more precise, Kingfisher Airlines went to be international in three years after opening and turned to be the largest air hose among other airways in India in terms of passenger numbers. Even more, it should also be mentioned that Kingfisher airlines were one of the six other air hoses across the globe that received six stars by the industry experts Skytrax. Therefore, it was one of the largest airways on the Indian market, especially in comparison to Air India, another local airline company. As might be expected, because of the group of reasons discussed above, Kingfisher Airlines was presented as a bearer of the future and hope for Indian airways industry.

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It is also a well-known fact that the company Kingfisher Airlines joined the amalgamation with Air Deccan. Therefore, since 2008, these two airways were operating as a single amalgamation under the name “Kingfisher Airlines.” Air Deccan had a clear goal to give a chance every Indian to fly with the help of establishing low prices. Therefore, it tried to find out the cheapest policies to apply in the air hose. In some time, this largest Indian airline company finally managed to shift the preference of citizens from the Rail travel to Air travel. Nevertheless, while Kingfisher was oriented on the international routes and was endlessly looking for a foreign group of interest, Air Deccan focused on the domestic routes and tried to become a low-cost carrier.

Also, it should be mentioned that being one of the largest international air hoses in the market, Kingfisher Airlines initially offered three different groups of service. The first group was Kingfisher First, a business class. The second group called Kingfisher Class that provided a premium economy service. And the last group Kingfisher Red was oriented on lower prices for flights.

What has happened?

After 2008, when the initial Kingfisher Company turned into the amalgamation with Air Deccan, the serious crisis took place connected with changes in the international market. Although during the first years the largest air hose managed to survive, the financial pressure in the market was not ended and only started to grow. Finally, regardless of its successful start up and growing international influence among other air hoses, five years ago, Kingfisher Airlines faced the serious decline that led to the major crisis. In fact, it had not given salaries to the employees for more than one year. Even more, the air hose lost the license to operate as an airline and, what is more, it got a great sum of bank loan. Consequently, the amalgamation was urged to cut to twenty-eight planes from sixty-six owing as a result of the financial crash. Therefore, the air hose, a primary the largest bearer of the future and hope of Indian airways market, failed to realize the goals.

Factors leading to the decline

To answer the question “What did happen?” with Kingfisher Airlines, it is necessary to mention that the decline was a business failure rather than a marketing failure. There are many possible factors leading to such a serious crisis of the largest Indian company that initially occupied a leading position in the market among other air hoses.

  1. Lack of delegation. After the company merged with Air Deccan, there were big changes in its strategy. Air Deccan had a kind of different directions of running the air hose, concerning not only low prices. Dr.Mallya, a leading figure in leading Kingfisher Airlines, is now believed to be a bearer of risk as he failed to lead the amalgamation. The fact that the company was managing two brands, one of which was low-cost, only enhanced the lack of concrete strategies. As it was already mentioned, Air Deccan had primarily different goals. Therefore, it was difficult for the company to combine its initial strategies with Air Deccan’s goals.
  2. In-flight interruptions. This is another factor leading to the overall decline in the largest business of air hoses, in addition to amalgamation with Air Deccan. Contrary to rail transport that provides for passengers a lot of scenery around to keep them busy, flights are usually more boring. Passengers looking for domestic flights are not willing to get in-flight entertainment. All they wanted is to reach their points of destinations as soon as possible, and the movies and other in-flight entertainments that were constantly interrupted only annoyed the passengers. Therefore, in-flight entertainment should be applicable only on international flights but not domestic, as it was in the case of Air India.
  3. Unfair fares and burning fuel. Kingfisher Airlines initially truly was offering a luxury service due to which could call itself a domestic budget airline, unlike Air India. It prevented itself from calling a low-cost carrier mainly because its fares were higher than usual low-cost carriers used to have, however, lower than the ones of Jet Airways or Air India. Besides, the fact that was ignored is that Kingfisher Airlines were operating in the sphere where fuel costs are not stable. In addition to all these facts, the budget was greatly affected by the establishment of exclusive lounges, fine dining for passengers in a sophisticated manner, and the costs connected with additional services such as a fascinating starry sky, seat chargers, and many others.  Therefore, as well as Air India, the company charged its passengers much less than they really spent on service, especially as far as domestic flights are concerned.
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The lack of foreign investments. As well as Air India, Kingfisher Airlines failed to find the largest foreign air hoses that could invest in Kingfisher’s business. The primary reason for that is that according to the Indian rules of those times, foreign airways had no rights to invest in the local ones. As a result, a lot of largest operations and plans failed because of the lack of costs. Besides, many employees were protesting to provide service, demanding their salaries that were delayed for a serious period of time.

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Crisis of Kingfisher Airlines Essay
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Overview of Kingfisher Airlines Kingfisher Airlines, one of the three existing major air hoses in India, was founded fourteen years ago and was the first airline in the Indian market that secured premium flights for passengers on domestic routes for relatively low prices. In a few years after its establishment, the air hose became the largest domestic airline company with a wide option of both regional and international destinations. To be more precise, Kingfisher Airlines went to be i
2019-01-18 02:02:19
Crisis of Kingfisher Airlines Essay
$ 13.900 2018-12-31
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