Description
This is a ppt on kingfisher airlines market planning.
MARKETING PLANNING
HISTORY OF UB GROUP
Thomas Leishman – 1857 Vittal Mallya –1947 Vijay Mallya - 1983
Acquired smaller players in Beer and Liquor industry
Bought Scottish NEW CASTLE Acquired SHAW WALLACE
Acquired 100 % stake in WHYTE AND MACKAY Media alliance with NDTVGood Time
Bought RCB Started FORCE INDIA
UB Group Timeline
Started KINGFISHER & MCDOWELLS in 1960
1960-2003
2005
2007
2008
KFA merged in DAL and renamed as Kingfisher Airlines Limited Alliance with Jet Airways
Built brands like KINGFISHER, BAGPIPER, BLACK DOG
KINGFISHER AIRLINES started
Announced merger of KFA with DECCAN
HISTORY OF INDIAN AVIATION INDUSTRY
1932 : Tata Airlines, a division of Tata Sons, is established, opening up the aviation sector in India
1953 : Nationalization of Aircraft Industry Consequently, assets of 9 existing companies transferred to two entities controlled by the Government a) Indian Airlines, primarily serving domestic sectors b) Air India, primarily serving the international sectors 1986 : Private Sector Players permitted as Air Taxi operators Players including Jet, Air Sahara, NEPC, East West, Modiluft started service 1994 : Private Carriers permitted to open scheduled services
Six operators granted license however only Jet and Air Sahara able to service
2003 : Entry of Low Cost Carriers Air Deccan, Spice Jet, Go Air, Indigo 2004: Private Carriers permitted to operate on International routes 2005 : Kingfisher Airlines starts operation
SNAPSHOT OF INDIAN AIRLINE INDUSTRY
• High growth potential due to growing economy and highly under penetrated market – 0.02 trips per capita per annum – Long-term GDP growth at 7% annually India would be the second fastest growing travel and tourism economy in the world
•
`
KINGFISHER AIRLINES
• • UB Group entered the Aviation Industry with Kingfisher Airlines on May 9, 2005 Kingfisher Airlines operates in three classes of service 1. Kingfisher First (Business class) 2. Kingfisher Class (Premium economy) 3. Kingfisher Red (Low fare) Merged with Air Deccan in 2007 Started International operations on September 3, 2008 Covers 72 destinations with a fleet size of 50 India?s only 5 Star accredited airline Rated Asia Pacific?s most admired airline brand Rated amongst India?s 25 Innovative Companies
• • • • • •
SEGMENTATION
Kingfisher Airlines has segmented the market in the following ways: • Income Group : Affluent Class Middle Class Strivers City wise : Tier 1 or Metro cities, Tier 2 cities and Tier 3 cities Usage Rate : Frequent fliers and the First timers Customer Loyalty : Hard Core loyals, Split loyals and Switchers Purpose of Travel : Business travelers and Leisure travelers
• • • •
TARGETING
The segments that Kingfisher Airlines targets are: ? The Affluent and the Middle class ? The Business and Leisure Travelers
Some of the services offered by kingfisher do emphasize on their policy to target those segments who are willing to pay for luxury
POSITIONING
• Budget airline providing Five Star facilities at an affordable rate • Fun and Luxury Airline
CUSTOMER PERCEPTION
• • • Link to Vijay Mallya?s flamboyant personality High flyer Brand Quality Service
CUSTOMER SATISFACTION
• • • „India's No 1 airline in customer satisfaction? - Business World magazine Recognized for „Service Excellence for a new airline? - Skytrax Best customer satisfaction in terms of Luxury, Economy and Service Punctuality
PROMOTION STRATEGY
• • Many Events and Advertisements by which Kingfisher Airlines is promoted There are multiple touch points and finer promotional services working for the promotional activities. e.g. 1. Advertisement hoardings at airports depicted the stylish interiors of the 'Funliners', which conveyed a youthful, fun-filled, and world-class image 2. INOX multiplexes in Mumbai publicized KFA's special offers for a month 3. KFA was the official travel airline for the cast and crew of 'Mangal Pandey' and gave a red carpet welcome to all the guests who attended the premiere of the film Loyalty and frequent flyer programs are also carried out called as “King Club” – 'Fly Free' offer Tie ups with Hotels & other Companies Brand Ambassadors – Youth Icons - Yana Gupta and Deepika Padukone
•
• •
VOLUME SHARE
Source : Directorate General of Civil Aviation
GEOGRAPHIC SHARE
Kingfisher has grown geographically by adding 129 new routes connecting 22 cities from 2005 to 2007
PASSENGER GROWTH TREND IN INDIA
Source : Airports Authority of India ( AAI )
Source: Directorate General of Civil Aviation
GROWTH DRIVERS
International Air Passengers
20 18 15 11.9 13.2
Tourism
15
10
5
•
PAX( in Mn)
0
Domestic Tourism growth CAGR @ 15% Boost with rising per capita income and increased consumerism Foreign Tourist Arrivals growth @ 20%
• •
FY02
FY03
FY04
FY05
Financial Year
COMPETITION ANALYSIS
Increase in number of players due to:
• End of State Monopoly post liberalization • Opening of Indian skies to private players in 1994 presented unprecedented growth opportunities • 40% FDI Allowed and subsequently increased to 49% • LCC Model • International Skies opened for private players in November, 2004
Players in Indian Aviation Industry
Full Service Airlines (FSA)
Low Cost Airlines
Regional Airlines
Charter Airlines
Cargo Airlines
Air India
Kingfisher Red
Emric Air
Club one Air
Blue Dart
Jet Airways
Jetlite
Air Dravida
Deccan Charters
Flyington Airlines
Kingfisher Airlines
Indigo Airlines
MDLR Airlines
Aryan Cargo Airlines
GoAir
Ran Air
Deccan 360
Spice Jet
Jagson Airlines
Paramount Airlines
• Consolidation in the Indian Air Industry due to
Increasing prices of ATF Excess Capacity Poor Infrastructure Intense Price Competition Economic Slowdown Lack of skilled Labour Huge Debt Burden
• Three Major Players
2/3 rd of Market share controlled by them Operate Full Cost and Low Cost Carriers Fly on both Domestic and International Routes
ANALYSIS
Can the airline break even by filling in more seats?
The additional amount that can be earned by selling one more seat in every flight: • Indian Airlines stands to earn as much as 10.3 crore per quarter if they sell just one seat more in every flight they operate • SpiceJet could afford to sell six seats per flight less and still break even • Kingfisher earns the highest per seat at Rs 11.3 crore per quarter • For Jet Airways, it has to sell 49 seats more per flight to break even Kingfisher, can make up for its losses by selling more seats as it will have to sell 21 seats more per flight at current realization to break even! Easier for Kingfisher to break even as compared with its nearest competitors In real life, it may be more practical for an airline to focus on chosen flights and sell say 10 more seats in each of them rather than sell one more seat in every flight
Are the number of turnarounds optimal?
Turn Around Time: The time between two flights, that the aircraft spends on the ground getting cleaned and with passengers disembarking and embarking Dividing the number of flights per day operated by each airline by the number of aircrafts they own gives us the average trips per day for different airlines • • • • SpiceJet is doing 10 trips per aircraft per day Indian Airlines is doing only 4.5 trips per day Jet Airways is doing just 2.2 trips per day Kingfisher is doing 7.5 trips per day
If each airline were to make one more trip per day per aircraft, and have 100 paying passengers in this additional flight:
Keeping operating costs aside , Kingfisher would reduce its losses by as much as 60 %
FLEET TYPE ANALYSIS
• • • • • • Kingfisher Indian Airlines Jet Airways SpiceJet Paramount - Airbus and ATR - Airbus and Boeing - Aircraft, The Airbus 330, Boeing 737 and ATR - The Boeing 737 Next Gen - The Embrae
Operating multiple types of aircraft and multiple variants within them means you need people certified to maintain, manage and fly each one of them separately
•
Also your spare parts inventory has to cover all variants that you operate
All these lead to higher operating costs Thus Kingfisher, should avoid bringing in new types of aircrafts into its fleet
Strengths
Weakness
Excess Capacity
Opportunity
Underpenetrated domestic market International market Untapped air cargo market
Threat
Full new fleet of aircraft Brand image Unmatched flight service Route rationalization
Competition
Yet not in profit
High Prices Mounting Debts
Economic Slowdown
Fuel price hike
Expanding tourism industry
Infrastructure Issues
RECOMMENDATIONS
(A) Cost Reduction : • • • Rationalization of loss making routes both on the domestic and international sector Rationalization of man power at Indian and Foreign Stations by closure of certain offices Reduction of contractual employment and outsourcing of work
(B) Revenue Enhancement : • • • • Increase in Passenger Revenue through improved marketing initiatives Increase in Cargo Revenue through better utilization of belly space on line flights and cargo freighters Increase in excess baggage revenue Entrusting Engine MRO/Line Maintenance to a separate Strategic Business Unit resulting in better utilization of capacity and optimum utilization of manpower resources
C) Turn Around Time Reduction in the turn Around Time improves the profitability of each flight.
D) Passenger Load Factor
To be profitable the Passenger Load Factor of Kingfisher should be greater than 85 per cent
Source: Centre for Asia Pacific Aviation & Ministry of Civil Aviation
REFERENCES
www.airportsindia.org.in www.dgca.nic.in www.travel.inernetindia.com www.expresstravelword.com www.airlinequality.com www.flykingfisher.com www.theubgroup.com
doc_156535038.pptx
This is a ppt on kingfisher airlines market planning.
MARKETING PLANNING
HISTORY OF UB GROUP
Thomas Leishman – 1857 Vittal Mallya –1947 Vijay Mallya - 1983
Acquired smaller players in Beer and Liquor industry
Bought Scottish NEW CASTLE Acquired SHAW WALLACE
Acquired 100 % stake in WHYTE AND MACKAY Media alliance with NDTVGood Time
Bought RCB Started FORCE INDIA
UB Group Timeline
Started KINGFISHER & MCDOWELLS in 1960
1960-2003
2005
2007
2008
KFA merged in DAL and renamed as Kingfisher Airlines Limited Alliance with Jet Airways
Built brands like KINGFISHER, BAGPIPER, BLACK DOG
KINGFISHER AIRLINES started
Announced merger of KFA with DECCAN
HISTORY OF INDIAN AVIATION INDUSTRY
1932 : Tata Airlines, a division of Tata Sons, is established, opening up the aviation sector in India
1953 : Nationalization of Aircraft Industry Consequently, assets of 9 existing companies transferred to two entities controlled by the Government a) Indian Airlines, primarily serving domestic sectors b) Air India, primarily serving the international sectors 1986 : Private Sector Players permitted as Air Taxi operators Players including Jet, Air Sahara, NEPC, East West, Modiluft started service 1994 : Private Carriers permitted to open scheduled services
Six operators granted license however only Jet and Air Sahara able to service
2003 : Entry of Low Cost Carriers Air Deccan, Spice Jet, Go Air, Indigo 2004: Private Carriers permitted to operate on International routes 2005 : Kingfisher Airlines starts operation
SNAPSHOT OF INDIAN AIRLINE INDUSTRY
• High growth potential due to growing economy and highly under penetrated market – 0.02 trips per capita per annum – Long-term GDP growth at 7% annually India would be the second fastest growing travel and tourism economy in the world
•
`
KINGFISHER AIRLINES
• • UB Group entered the Aviation Industry with Kingfisher Airlines on May 9, 2005 Kingfisher Airlines operates in three classes of service 1. Kingfisher First (Business class) 2. Kingfisher Class (Premium economy) 3. Kingfisher Red (Low fare) Merged with Air Deccan in 2007 Started International operations on September 3, 2008 Covers 72 destinations with a fleet size of 50 India?s only 5 Star accredited airline Rated Asia Pacific?s most admired airline brand Rated amongst India?s 25 Innovative Companies
• • • • • •
SEGMENTATION
Kingfisher Airlines has segmented the market in the following ways: • Income Group : Affluent Class Middle Class Strivers City wise : Tier 1 or Metro cities, Tier 2 cities and Tier 3 cities Usage Rate : Frequent fliers and the First timers Customer Loyalty : Hard Core loyals, Split loyals and Switchers Purpose of Travel : Business travelers and Leisure travelers
• • • •
TARGETING
The segments that Kingfisher Airlines targets are: ? The Affluent and the Middle class ? The Business and Leisure Travelers
Some of the services offered by kingfisher do emphasize on their policy to target those segments who are willing to pay for luxury
POSITIONING
• Budget airline providing Five Star facilities at an affordable rate • Fun and Luxury Airline
CUSTOMER PERCEPTION
• • • Link to Vijay Mallya?s flamboyant personality High flyer Brand Quality Service
CUSTOMER SATISFACTION
• • • „India's No 1 airline in customer satisfaction? - Business World magazine Recognized for „Service Excellence for a new airline? - Skytrax Best customer satisfaction in terms of Luxury, Economy and Service Punctuality
PROMOTION STRATEGY
• • Many Events and Advertisements by which Kingfisher Airlines is promoted There are multiple touch points and finer promotional services working for the promotional activities. e.g. 1. Advertisement hoardings at airports depicted the stylish interiors of the 'Funliners', which conveyed a youthful, fun-filled, and world-class image 2. INOX multiplexes in Mumbai publicized KFA's special offers for a month 3. KFA was the official travel airline for the cast and crew of 'Mangal Pandey' and gave a red carpet welcome to all the guests who attended the premiere of the film Loyalty and frequent flyer programs are also carried out called as “King Club” – 'Fly Free' offer Tie ups with Hotels & other Companies Brand Ambassadors – Youth Icons - Yana Gupta and Deepika Padukone
•
• •
VOLUME SHARE
Source : Directorate General of Civil Aviation
GEOGRAPHIC SHARE
Kingfisher has grown geographically by adding 129 new routes connecting 22 cities from 2005 to 2007
PASSENGER GROWTH TREND IN INDIA
Source : Airports Authority of India ( AAI )
Source: Directorate General of Civil Aviation
GROWTH DRIVERS
International Air Passengers
20 18 15 11.9 13.2
Tourism
15
10
5
•
PAX( in Mn)
0
Domestic Tourism growth CAGR @ 15% Boost with rising per capita income and increased consumerism Foreign Tourist Arrivals growth @ 20%
• •
FY02
FY03
FY04
FY05
Financial Year
COMPETITION ANALYSIS
Increase in number of players due to:
• End of State Monopoly post liberalization • Opening of Indian skies to private players in 1994 presented unprecedented growth opportunities • 40% FDI Allowed and subsequently increased to 49% • LCC Model • International Skies opened for private players in November, 2004
Players in Indian Aviation Industry
Full Service Airlines (FSA)
Low Cost Airlines
Regional Airlines
Charter Airlines
Cargo Airlines
Air India
Kingfisher Red
Emric Air
Club one Air
Blue Dart
Jet Airways
Jetlite
Air Dravida
Deccan Charters
Flyington Airlines
Kingfisher Airlines
Indigo Airlines
MDLR Airlines
Aryan Cargo Airlines
GoAir
Ran Air
Deccan 360
Spice Jet
Jagson Airlines
Paramount Airlines
• Consolidation in the Indian Air Industry due to
Increasing prices of ATF Excess Capacity Poor Infrastructure Intense Price Competition Economic Slowdown Lack of skilled Labour Huge Debt Burden
• Three Major Players
2/3 rd of Market share controlled by them Operate Full Cost and Low Cost Carriers Fly on both Domestic and International Routes
ANALYSIS
Can the airline break even by filling in more seats?
The additional amount that can be earned by selling one more seat in every flight: • Indian Airlines stands to earn as much as 10.3 crore per quarter if they sell just one seat more in every flight they operate • SpiceJet could afford to sell six seats per flight less and still break even • Kingfisher earns the highest per seat at Rs 11.3 crore per quarter • For Jet Airways, it has to sell 49 seats more per flight to break even Kingfisher, can make up for its losses by selling more seats as it will have to sell 21 seats more per flight at current realization to break even! Easier for Kingfisher to break even as compared with its nearest competitors In real life, it may be more practical for an airline to focus on chosen flights and sell say 10 more seats in each of them rather than sell one more seat in every flight
Are the number of turnarounds optimal?
Turn Around Time: The time between two flights, that the aircraft spends on the ground getting cleaned and with passengers disembarking and embarking Dividing the number of flights per day operated by each airline by the number of aircrafts they own gives us the average trips per day for different airlines • • • • SpiceJet is doing 10 trips per aircraft per day Indian Airlines is doing only 4.5 trips per day Jet Airways is doing just 2.2 trips per day Kingfisher is doing 7.5 trips per day
If each airline were to make one more trip per day per aircraft, and have 100 paying passengers in this additional flight:
Keeping operating costs aside , Kingfisher would reduce its losses by as much as 60 %
FLEET TYPE ANALYSIS
• • • • • • Kingfisher Indian Airlines Jet Airways SpiceJet Paramount - Airbus and ATR - Airbus and Boeing - Aircraft, The Airbus 330, Boeing 737 and ATR - The Boeing 737 Next Gen - The Embrae
Operating multiple types of aircraft and multiple variants within them means you need people certified to maintain, manage and fly each one of them separately
•
Also your spare parts inventory has to cover all variants that you operate
All these lead to higher operating costs Thus Kingfisher, should avoid bringing in new types of aircrafts into its fleet
Strengths
Weakness
Excess Capacity
Opportunity
Underpenetrated domestic market International market Untapped air cargo market
Threat
Full new fleet of aircraft Brand image Unmatched flight service Route rationalization
Competition
Yet not in profit
High Prices Mounting Debts
Economic Slowdown
Fuel price hike
Expanding tourism industry
Infrastructure Issues
RECOMMENDATIONS
(A) Cost Reduction : • • • Rationalization of loss making routes both on the domestic and international sector Rationalization of man power at Indian and Foreign Stations by closure of certain offices Reduction of contractual employment and outsourcing of work
(B) Revenue Enhancement : • • • • Increase in Passenger Revenue through improved marketing initiatives Increase in Cargo Revenue through better utilization of belly space on line flights and cargo freighters Increase in excess baggage revenue Entrusting Engine MRO/Line Maintenance to a separate Strategic Business Unit resulting in better utilization of capacity and optimum utilization of manpower resources
C) Turn Around Time Reduction in the turn Around Time improves the profitability of each flight.
D) Passenger Load Factor
To be profitable the Passenger Load Factor of Kingfisher should be greater than 85 per cent
Source: Centre for Asia Pacific Aviation & Ministry of Civil Aviation
REFERENCES
www.airportsindia.org.in www.dgca.nic.in www.travel.inernetindia.com www.expresstravelword.com www.airlinequality.com www.flykingfisher.com www.theubgroup.com
doc_156535038.pptx