Kingfisher, one of India's most well-known airlines, is in disarray, while other Kingfisher competitors are doing well. The worldwide aviation industry faced challenges in 2012 as a result of a four-year fuel price increase that established a record, volatile financial markets, and a faltering economy. Kingfisher Airlines, often known as The King of Good Times, and Vijay Mallya's dream project, went through a hard patch. Kingfisher's early models included single-class layouts, all-economy fare, and high-end entertainment and dining options. Vijay Mallya knew how to live the king's life and was only concerned with the idea that every air passenger would expect their flight with Kingfisher Airlines to be similar to that of a monarch. A year after the airline was created, the high luxury class came into focus. The airline was unable to sustain stability due to shifting time and model ideas, as well as anticipated unpredictable expansion.
Background Of Kingfisher Airlines
Starting an airline company is difficult, but maintaining it over time is even more difficult. Kingfisher was a significant passenger airline known as "The King of Good Time." United Breweries Group, a Bengaluru-based firm, launched it in 2003. It entered the aviation market at a period when low-cost carriers were reviving the industry and making air travel accessible to all Indians. They swiftly rose to become India's fifth-largest passenger airline, providing consumers with low-cost domestic and international flights. Vijay Mallya, the proprietor of Kingfisher, had vast experience in the brewing industry. He has earned the moniker "Liquor Baron." He continued the family business legacy at the age of 28, and his luxurious lifestyle drove him to corporate notoriety at an early age. He coined the beer tagline "King of all Times" and used his celebrity to boost United Breweries Group's brand. Despite his expertise in that industry, he lacked experience running enterprises such as airlines, which led to Kingfisher Airlines' bankruptcy.
These Are Some Of The Important Reasons Why Kingfisher Failed
Acquisition of Air Deccan
Expansion in The International Arena
Lack Of Stability at The Apex Level of Management
Switching from Premium Class Airline to the Low Budget Segment
Increasing Cost of Fuel
Acquisition Of Air Deccan
The first was the purchase of Air Deccan, a low-cost airline. Despite the fact that KFA acquired all of Air Deccan's aircraft and market, it also inherited its losses. KFA joined with Air Deccan, a low-cost airline with low fares, in 2007, to replace Kingfisher, a high-cost airline known for its elegance. Kingfisher reasoned that because Air Deccan had already established itself in the market, this would help the company's financial position. Another factor was that, unlike Air Deccan, Kingfisher had five years of domestic experience. To earn an international pilot's license, you must have five years of domestic experience. Following the merger with Air Deccan, Kingfisher Red was launched in 2008.
Expansion In The International Arena
Another decision that harmed KFA's efficiency was the rapid expansion of international services. KFA joined the worldwide market after acquiring Air Deccan. After consolidating the domestic service, which had by then captured a considerable piece of the Indian market, this entry into a large market would have been excellent. KFA's overseas venture was a colossal failure. That was always going to be the way it was. How could a man with no domestic airline expertise prosper in the choppy waters of international competition? Emirates and Etihad, for example, dominated international skies and had a dedicated fan base. The nascent KFA found it too difficult to break its monopoly and hence collapsed.
Lack Of Stability At The Apex Level Of Management
Another factor contributing to KFA's demise and dissolution was a lack of continuity at the top of the organization. As previously said, KFA's owner was a newbie to the aviation sector, and the CEO was in charge of the company's direction. In contrast, no CEO stayed at KFA for more than a year. Things may have turned out differently if KFA had hired an experienced CEO like Gopinath of Air Deccan and kept him for the entire five-year term. Aside from breweries and KFA, Malley's commercial interests were numerous and desperate. His booze industry thrived because the breweries were managed by qualified staff. KFA, on the other side, did not do as well. Because of his political connections (Vijay Mallya was a Rajya Sabha Member of Parliament)
Switching From Premium Class Airline To The Low Budget Segment
KFA established a reputation as a premium airline that catered to the needs of high-level business leaders and politicians. It steadily grew its brand over a short period of time. When it hit the low-cost market, however, it lost its appeal. It was difficult to negotiate the low-cost market. Indigo, SpiceJet, and other competitors controlled the market. It was challenging, particularly in the home market. The competition was fierce, and KFA's hopes for a quick buck were crushed. KFA's service deteriorated over time, and customers switched to other airlines.
Increasing Cost of Fuel
Jet fuel prices have been gradually rising as a result of rising demand and airline rivalry, making it impossible for KFA to cover its fuel consumption expenditures. Due to their refusal to pay their fuel costs, multiple vendors, including BPC, filed a complaint against KFA in the Bangalore High Court. Their fuel costs had increased by around 70%. Bharatiya Petroleum Corporation.
Conclusion
KFA's collapse as one of India's greatest airlines has been attributed to the team's inability to make sound decisions. The acquisition of Air Deccan, the service's quick entry into the international arena, and its segment shift, which encouraged rivalry, were all critical causes in its downfall. External factors such as the high cost of aviation fuel could also be to blame. KFA's gasoline costs continued to climb. All airlines, including KFA's competitors, have faced this issue, but they have devised solutions.
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