Preview

Kingfisher Airline Revival Plan

Good Essays
Open Document
Open Document
3907 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Kingfisher Airline Revival Plan
AF2110 Management Accounting 1 Kingfisher Airline Revival Plan
Group 8

CONTENTS
1) Introduction
3-4
2) Decision Analysis
Buy or lease decision
Aircraft configuration decision
Pricing decision
4-7
3) Cost Analysis
Variable cost
Commission expense
Fuel cost
Employee cost
Fixed cost
Aircraft leasing cost and depreciation
Landing and navigation cost
Interest expense
7-9
4) Other Recommendation
Transform into low fixed cost structure
Lowering the currency related cost
Practice divisional profitability analysis
Join alliance
Practice grid routing system
9-12
5) Reference
13-15
6) Appendix
Estimation used by the relevant cost analysis
Estimation used by the sales mix analysis
Forecast Operation
16-17

1. Introduction
We are going to investigate Kingfisher Airlines (KFA) for in-depth analysis, which would integrate management accounting topics of cost behavior, sales mix, buy or lease decision, pricing decision making and performance measurement.
Kingfisher Airlines was an Indian full-service airline established in 2003{1}. It started commercial operations, involving domestic and international flights, on 9 May 2005. On one hand, it was nominated by Skytrax as a world 5-Star Airline for the 2010 ranking period because of its excellent product and service quality{2}. On the other hand, Kingfisher Airlines had not made profit since starting operations in 2005, so it tried to reduce cost{3}. For example, from 10 April 2012, Kingfisher Airlines had suspended all international journeys. A partial lock-out happened on 1 October in the same year because of the delay payment of salaries, which eventually led to labour strike. On 20 October 2012, Directorate General of Civil Aviation (DGCA) prohibited Kingfisher Airlines from flying on the grounds of potential inconvenience to the travelling public. Bangalore International Airport Limited also sued Kingfisher Airlines for the user development fee and passenger

You May Also Find These Documents Helpful

  • Better Essays

    Bac203 Week 3 Assignment

    • 3568 Words
    • 15 Pages

    task analysis to focus on how much a product should cost (e.g., time and motion…

    • 3568 Words
    • 15 Pages
    Better Essays
  • Good Essays

    Measuring Price Elasticity

    • 1158 Words
    • 5 Pages

    What is the formula for measuring price elasticity of demand? Percentage change in quantity demanded / Percentage change in price…

    • 1158 Words
    • 5 Pages
    Good Essays
  • Better Essays

    To determine the profitability of the airline industry, we will do an industry analysis using…

    • 2051 Words
    • 16 Pages
    Better Essays
  • Powerful Essays

    At the beginning, JetBlue management set the tone for themselves that they would be different then other airlines. To do that they set values for all employees from top to bottom to follow and they set up an attractive pay and a unique benefits package that would allow for successful recruitment and retention of employees, while significantly reducing the chance of a union moving into the organization.…

    • 1995 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    5) Gill, Kathy (2006, Oct, 16). Airline troubles mean job, pay cuts. About.com, Retrieved August 9, 2011, from http://uspolitics.about.com/b/2004/10/16/airline-troubles-mean-job-pay-cuts.htm…

    • 5450 Words
    • 22 Pages
    Good Essays
  • Powerful Essays

    Frontier Airline has its own core competencies that have ensured its survival. It is one of the earliest airlines in the history of aviation and is still standing strong at the moment competing with its rivals (Courtwright 120). Public and private investors have put over four hundred and fifty thousand dollars to ensure that the airline does not fail to meet its set objectives. This assistance helped the fares to Denver decreasing significantly. Frontier Airlines has the most competitive fares attracting so many clients. This is the main factor that…

    • 2051 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    JetBlue Airways Corporation got its start on February 11, 2000, and has since grown exponentially from the mere beginnings of $160 million. The company prides itself on standing out from the crown, offering leather seating, personal Televisions, and the option to choose “point-to-point” flights, just to name a few (SlideSahre.net, 2010). They have established themselves in the air world as offering a differentiated product as well as low fares. Their approach to reaching destinations is different than many other airlines, such as using the point-to-point system.…

    • 1296 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    Southwest Airlines is one of the most successful airlines in the world. Their success comes from many different sources within the company. Today, most airlines are purely focused on growth, and tend to “nickel and dime” their customers to make up for profit losses. Southwest, on the other hand, has put an increased focus on their customers. They’re constantly striving to provide low ticket prices and excellent customer service. Southwest has been able to make a profit 39 years in a row. Even post 9/11 when most companies were filing for bankruptcy, Southwest was able to make a profit (Anonymous, 2010). Southwest’s managers have been able to do this by keeping costs low and making decisions different from other airlines. More specifically, Southwest Airlines has focused on CVP analysis, activity-based costing, budgeting, and responsibility accounting to keep their costs low.…

    • 792 Words
    • 4 Pages
    Better Essays
  • Good Essays

    JetBlue Airways, the latest entrant in the airlines industry has gone through the initial stages (entrepreneurial and collectivity) of the organizational life cycle rapidly under the successful leadership of David Neelman. JetBlue Airways is currently in the formalization stage of the life cycle where in it needs to create procedures and control systems to effectively manage its growth. Also as it proceeds to grow further to reach the elaboration stage, JetBlue needs to continue to align itself with the environment in order to maintain its sustained growth.…

    • 1128 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Company Profile

    • 772 Words
    • 4 Pages

    Kingfisher Airlines Ltd is India’s largest company for chartered aviation. They operate in commercial passenger airlines, private helicopter and chartered airplane divisions. They also have Air Deccan, India’s low cost carrier in their business units. It was started on June 15, 1995 with Deccan Aviation as name and as private limited company. The promoters of the company were G R Gopinath, K J Samuel and Vishnu Singh Rawal. In Jan 2005, it was converted in a public limited company. In Sept 1997, it opened their first base at Jakkur and launched their first Helicopter. In Jun 1998, their second base at Hyderabad was opened and in Dec 1998, operations of offshore flying were started. In Jun 2001,the company launched the first fixed wing aircraft and in Nov, was launched the second one. In Aug 2003, first Air Deccan flight flew from Bangalore to Hubli and Mangalore. In Dec 2003, was incorporated Deccan Aviation (Lanka) Pvt Ltd, in a joint venture with the company. Deccan Aviation company was established as a 52% for undertaking Sri Lankan helicopter services and airline operations. In Aug 2004, they introduced first Airbus A 320. In Mar 2005, Air Deccan, entered in a tie up agreement with Club HP. In Jun 27, 2005, Deccan Aviation ceased to be a subsidiary and consequently transferred 4% of their shares to Srilanka nationals. In Mar 2007, through a wholly owned susbsidiary,they forayed into Air Cargo Business. The company made Charter Services a separate entity and also transferred the Maintenance and Repair Facility into a separate entity. The Airline business of Kingfisher Airlines Ltd was finally merged with the company wef April 1, 2008 and its name was changed to Kingfisher Airlines Ltd.…

    • 772 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    Kenya Airways Ltd is the national carrier of Kenya. The company was established in 1977, after the dissolution of East African Airways. It was privatized in 1992, and it is publicly listed I in the National Security Exchange.…

    • 1205 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    This essay examines the challenges faced by Hong Kong’s full service airlines nowadays. Air transportation serves not only to encourage trade and growth in the tourism industry in Hong Kong, but also to improve people 's mobility and to form a modern society. In this essay, full service airline is defined as traditional airline that provides services such as allocated seat, transfer of baggage between flights, blankets and meals. Full service airlines suffer several challenges in the aspect of production cost for developing advanced system and competition with low-cost airlines nowadays. For this reason, I would like to investigate the challenges in depth according to the above aspects and figure out possible solutions.…

    • 1243 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Labour Unrest

    • 1770 Words
    • 8 Pages

    Kingfisher Airlines Ltd , controlled by liquor baron Vijay Mallya, cancelled all flights through Thursday because of labour unrest and was ordered by the aviation regulator to submit a revival plan before it can fly again.…

    • 1770 Words
    • 8 Pages
    Good Essays
  • Satisfactory Essays

    Kingfisher Airlines

    • 271 Words
    • 2 Pages

    A.K. Ravi Nedungadi Diwan Arun Nanda Mr. V.K. Rekhi Dr. Naresh Trehan  Mr. Rup Pillai Management Team Kingfisher Airlines is led by a dynamic, extremely talented andexperienced team: Board of Directors  Dr. Vijay Mallya, Chairman & CEO  Mr. Subhash Gupte, Vice–Chairman, The UB Group  Mr. Piyush Mankad  Mr. A.K. Ravi Nedungadi  Diwan Arun Nanda  Mr. V.K. Rekhi  Dr. Naresh Trehan  Mr. Rup Pillai Operating Team  Mr. A. Raghunathan, Executive Vice President and Chief Financial Officer  Mr. Hitesh Patel, Executive Vice President  Mr.Rajesh Verma, Executive Vice President  Captain D D Gandhi, Vice President – Operations  Chandrashekhar Nene, Vice President – IT  Mr. C.S. Tomar, VP- Engineering & Maintenance  Bharat Raghavan, Assistant Vice President - Legal andSecretarial  Ms. Rubi Arya, Assistant Vice President HR  Mr. Ajit Bhagchandani, General Manager - In-Flight-Services  Mr. Ashwani Khanna, General Manager - Airport Services  Mr. Bhupesh Joshi, General Manager – Airports  Capt Jesudasan, Chief Examiner  Captain K. Ravindran, General Manager - Flight Safety  Major Leslie Ojjit Missal, General Manager – Security  Mr. Ratan Ratnakar, General Manager - Revenue Optimization  Mr. Sanjay Bahadur, General Manager - Corporate Affairs  Mr. Shailesh Borkar, General Manager – Finance  Mr. Umesh Rindani, General Manager - Revenue Accounts  Mr. S.K. Ghorai, General Manager - Quality Control  Captain Sanjeev Marwah, GM-Flight Ops (A320)  Capt PA Bhushan, GM-Flight Operations (ATR)  Mr. Gaurav Rathore, General Manager - Quality & GuestCommitment  Mr. Vijay Nair,…

    • 271 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Q1 what has been Southwest’s traditional pricing strategy? Why has this pricing strategy been so successful thought out the airline’s first three decades?…

    • 445 Words
    • 2 Pages
    Good Essays