Kf Strategy
BUSINESS POLICY AND STRATEGY MANAGEMENT
Kingfisher Airline Crisis & Strategy for Sustenance
Table of Contents ABSTRACT 2 AIRLINE INDUSTRY IN INDIA 3 KINGFISHER AIRLINES 4 STRATEGIC ISSUES WITH KFA 6 WHAT WENT AGAINST KINGFISHER AIRLINES? 8 AVIATION INDUSTRY ANALYSIS 10 Five forces in Aviation Industry in India 10 KINGFISHER AIRLINES’ ANALYSIS 11 SWOT Analysis 11 Financial Analysis 12 Kingfisher’s Acquisition of Deccan: Game Theory 14 COMPETITOR ANALYSIS 16 Competitive Profile Matrix 16 STRATEGY FORMULATION AND EVALUATION 19 SPACE Matrix 19 Quantitative Strategic Planning Matrix (QSPM) 20 RECOMMENDATIONS FOR KINGFISHER AIRLINES RECOVERY 22 Functional Level Strategy 22 Business Level Strategy 23 Corporate Level Strategy 23 CORPORATE GOVERNANCE, STRATEGIC CONTROL AND ETHICS 24 RECOMMENDATIONS SUMMARISED 26 Reference 27
ABSTRACT
Kingfisher Airlines is facing a debt crisis with debt exposures from leasers and financial institutions worth more than Rs.8919.86 Crore as of 08/Aug/2012 and the consortium of lenders headed by State Bank of India has termed the firm as a Non Performing Asset. The increasing in aviation turbine fuel price, undercutting of ticket prices to win customer base, improper managerial accounting, and glamorous life style of owner has made Kingfisher to run n to deeper losses and ground its low cost fleet Kingfisher Red. Over the course of time from its launch in 2005, Kingfisher Airlines has lost its reputation among its customers and employees due to cancellation of flights and delay in salary payments and is facing the ire of government as well as financial firms for violation of DGCA rules and payments. KFA currently requires a major debt restructuring and proper recovery plan, with injection of fresh liquidity for working capital and payments. The funding needs can be met internally by selling the non-core assets of Kingfisher and UB Group which the promoters do not prefer much. The
Kingfisher Airline Crisis & Strategy for Sustenance
Table of Contents ABSTRACT 2 AIRLINE INDUSTRY IN INDIA 3 KINGFISHER AIRLINES 4 STRATEGIC ISSUES WITH KFA 6 WHAT WENT AGAINST KINGFISHER AIRLINES? 8 AVIATION INDUSTRY ANALYSIS 10 Five forces in Aviation Industry in India 10 KINGFISHER AIRLINES’ ANALYSIS 11 SWOT Analysis 11 Financial Analysis 12 Kingfisher’s Acquisition of Deccan: Game Theory 14 COMPETITOR ANALYSIS 16 Competitive Profile Matrix 16 STRATEGY FORMULATION AND EVALUATION 19 SPACE Matrix 19 Quantitative Strategic Planning Matrix (QSPM) 20 RECOMMENDATIONS FOR KINGFISHER AIRLINES RECOVERY 22 Functional Level Strategy 22 Business Level Strategy 23 Corporate Level Strategy 23 CORPORATE GOVERNANCE, STRATEGIC CONTROL AND ETHICS 24 RECOMMENDATIONS SUMMARISED 26 Reference 27
ABSTRACT
Kingfisher Airlines is facing a debt crisis with debt exposures from leasers and financial institutions worth more than Rs.8919.86 Crore as of 08/Aug/2012 and the consortium of lenders headed by State Bank of India has termed the firm as a Non Performing Asset. The increasing in aviation turbine fuel price, undercutting of ticket prices to win customer base, improper managerial accounting, and glamorous life style of owner has made Kingfisher to run n to deeper losses and ground its low cost fleet Kingfisher Red. Over the course of time from its launch in 2005, Kingfisher Airlines has lost its reputation among its customers and employees due to cancellation of flights and delay in salary payments and is facing the ire of government as well as financial firms for violation of DGCA rules and payments. KFA currently requires a major debt restructuring and proper recovery plan, with injection of fresh liquidity for working capital and payments. The funding needs can be met internally by selling the non-core assets of Kingfisher and UB Group which the promoters do not prefer much. The