Management lessons from the embattled Kingfisher Airline
How can an airline obsession put a liquor baron on the rocks? Never had Mr. Vijay Mallaya seen a tight corner like this before. What is the first thing that comes to your mind when you think Kingfisher Airlines? Opulence; Dr. Vijay Mallaya: the king of good times; lovely air hostesses; in-flight entertainment etc. can be some of the things which come to every person’s mind. But nowhere does the word low cost, economy or cheap strikes our mind. Then what led Mr. Mallaya to acquire Air Deccan, the low cost airline founded by Capt. Gopinath, the pioneer in Indian low cost aviation? Kingfisher Airlines, owned by United Breweries commenced its operations in the year 2005 and in order to hasten its progress it acquired Air Deccan to enter into the international market and as a result incurred severe losses. It started as an all economy premium class configuration aircraft with food and entertainment system and suddenly shifted its focus to low cost economy class airline. It did numerous blunders some of which can be enlisted as follows: * Owning an airline like Air Deccan laid the responsibility of being highly lost cost and economy class on the shoulders of Kingfisher Airlines which was against the brand attributes of the airlines. * UB group which runs a domestic business followed the idea of being a closed group even after entering into a competitive industry like aviation, showed lack of corporate governance. * The company was opaque in its working and decision making which led to flow of negative sentiments among the employees. * The policy of predatory pricing was not properly sustained by the company. * The aggressive fleet expansion proved disastrous for the company as it was unable to manage and handle it. * To garner customer support it started doling out goodies to the customers which again the company could not sustain. * On incurring abysmal losses Kingfisher airlines again...
Please join StudyMode to read the full document