...Kingfisher Airlines update” October 2008 Agenda • • • • • UB Group: The growth story (slide 3) Airline Industry Overview (slide 9) Kingfisher Airlines Overview (slide 18) KFA Financials (slide 25) KFA Outlook (slide 31) 2 31st October 2008 UB Group: Growth Story 3 UB Group’s growth story SUCCESS MANTRAS • • India’s Leading branded consumer group Has dominated domestic market − Accelerated organic growth − Acquisitions • • Is Globally Competitive Has set standards of governance and transparency 4 31st October 2008 No. 1 Beer in India No. 1 Spirits in India No. 1 Airline in India What next? Merged Hebertsons into MCD Kept acquiring smaller players in beer and liquor industry. Brought in Scottish New Castle Market gave thumbs up as Margins doubled to 18% because of synergies Acquired 100% stake in Whyte and Mackay, worlds 4th largest scotch company Acquired further 20% stake in Deccan Aviation through open offer KFA merged in DAL and the merged entity renamed as Kingfisher Airlines Limited UB Group 2002 TIMELINE 2003 2005 2007 2007 2008 Bought Gilbey Green lablel BUILT BRANDS LIKE KINGFISHER, BAGPIPER, BLACK DOG … Acquired Shaw Wallace & Co Ltd Consolidated Beer business under UBL and liquor business under USL Acquired 26% in Deccan Aviation- Announced merger of KFA with Deccan,; Acquired further 3% stake in Deccan Aviation to increase the holding to about 50% Announced...
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...KINGFISHER AIRLINES (BSE: KFA.BO) EQUITY RESEARCH Investment Analysis Project (BEAM048) Module Coordinator: Mr. Jamie Stephenson Project Supervisor: Mr. Stanley Gyoshev Candidate Number: 005293 Student ID No. 600050722 Word count: 5806* *excludes tables, figures, appendices TABLE OF CONTENTS Executive Summary 5 1. Company Overview 6 A. Branding and Strategy 6 B. Recent Developments 7 2. Industry Review 8 A. Global Sector Overview 8 B. Aviation in India 9 a. Political Factors 9 Opportunities: 9 1. Foreign Direct Investment: 9 2. Infrastructure: 9 3. Debt Restructuring: 9 Threats: 10 1. Freedoms of Air agreements: 10 2. Ground handling Policy: 10 3. Spot Price Controls 10 4. World Politics: 10 b. Economic Factors 11 Opportunities: 11 1. GDP Growth: 11 2. Domestic Consumption and Per Capita Income: 12 Threats: 12 1. Global Recession: 12 2. Oil Prices: 13 3. Inflation: 13 c. Social Factors 14 Opportunities: 14 1. Per Capita Penetration 14 2. Demographics: Growing Middle Class and Urbanization 14 Threats: 15 1. Price Sensitivity: 15 d. Technological Factors 15 1. GAGAN – GPS Aided Geo Augmented Navigation 15 2. Google ITA Deal 15 3. Social Networking Sites 15 e. Legal Factors 16 1. Pilot Licenses 16 f. Environmental Factors 16 1. Geography 16 2. Carbon Foot Print 16 g. Security 16 3. Company Analysis 17 A. Revenues 17 B. Costs 18 C. Fleet Strategy:...
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...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 AnalysisVariable cost * Commission expense * Fuel cost * Employee costFixed 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 with cost behavior, sales mix, buy or lease decision and pricing decision making. 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...
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...Strategy Formulation : “Kingfisher Airline” “Strategies adopted by Kingfisher airlines & causes of its Failure” Submitted by : Japkirat Singh Oberai Submitted to : Dr. Supriti Mishra Contents 1) [ ABSTRACT ] 2) [ INTRODUCTION ] 3) [ HISTORY ] 4) [ STARTING OF THE CRISES ] 5) [ DEBT RESTRUCTURING ] 6) [ CRISIS TILL CONTINUE ] 7) [ FUEL DUES ] a. HPCL: In Jul 2011, Hindustan Petroleum 8) [ AIRCRAFT LEASE RENTAL DUES ] 9) [ AAI REPORTS ] 10) [ THE CRISIS CONTINUE ] 11) [ FROZEN BANK ACCOUNTS ] 12) [ IATA SUSPENSION ] 13) [ SWOT ANALYSIS ] b. [ KINGFISHER’S STRENGTHS ] c. [ KINGFISHER’S WEAKNESSES ] d. [ KINGFISHER’S OPPORTUNITIES ] e. [ KINGFISHER’S THREATS ] 14) [ PEST ANALYSIS ] f. [ Political Factors ] g. [ Social Factors ] h. [ Technological Factors ] i. [ Economical Factors ] 15) [ STRATEGIC PARTNERS ] 16) [ Strategy’s of Kingfisher Airlines ] j. [ Functional strategies ] k. KFA’s Promotional Strategies & Marketing Strategies l. [ Financial strategies: ] m. [ Expansion strategy ] n. [ Human Resource Strategies ] 17) [ UNCERTAINTY AHEAD ] Kingfisher Airlines – has a paradoxical situation faced by the airline industry in India which experienced exponential growth in passenger volumes; but with the exception of IndiGo Airlines, all the airlines failed to make profits. However...
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...international airline industry provides service to virtually every corner of the globe, and has been an integral part of the creation of a global economy. The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism, to name but two. This sector had its share of heightened challenges during the global financial crisis of 2000-2005 and 2008-09. The airline industry lost billions of dollars and some airlines struggled to remain in business. Today, the global airline industry consists of over 2000 airlines operating more than 23,000 aircraft, providing service to over 3700 airports. In 2006, the world’s airlines flew almost 28 million scheduled flight departures and carried over 2 billion passengers [1]. The growth of world air travel has averaged approximately 5% per year over the past 30 years, with substantial yearly variations due both to changing economic conditions and differences in economic growth in different regions of the world. Historically, the annual growth in air travel has been about twice the annual growth in GDP. Even with relatively conservative expectations of economic growth over the next 10-15 years, a continued 4-5% annual growth in global air travel will lead to a doubling of total air travel during this period. The economic importance of the airline industry and, in turn, its repercussions for aircraft manufacturers, makes the volatility of airline profits...
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...The financial agonies for Kingfisher Airlines (KFA) are seeming to become insurmountable. After being forced to massively scale down its operations and ground more than half of its fleet in the month of Feb 2012 when the IT-Dept froze its bank accounts over non-payment of tax dues, the estranged airliner has now cancelled all of its international operations and has the aviation regulator (DGCA) as well as the govt. breathing down its throat questioning the company’s ability to come up with a credible plan and revive the failing fortunes. The cash-strapped airlines may need Rs 3000-4000 crore to get itself back on its feet. The airline is burning cash at a rapid rate and it is no wonder that they are asking banks for additional working capital. Approximately 23% of the company is now owned by the banks that are already on the hook for approximately Rs 5,000 to Rs 6,000 crore of debt. They haven’t been paying their creditors for quite some time now. In the absence of additional capital coming into the company, Kingfisher has had no choice but to cut down on the operations, which is not a good sign because if you cut down on operations it will only cause further problems – they need to be in operation to repay their liabilities. All this is further putting pressure indirectly on the creditors to restructure the terms. So dire are Kingfisher’s circumstances that it recently bounced a $3m cheque to the Airports Authority of India, to which it owes around $40m in fees. Recently...
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...AND FALL OF KINGFISHER AIRLINES IN THOSE YEARS. Indian Aviation Industry It is one of the fastest Growing Aviation Market. There are approximately one billion people and 0.05% of them fly. More and more middle class families now prefer air transport than other traditional mode of transport. The Indian travel market has nearly tripled to $ 51 billion by 2011, from $16.3 billion in 2005-06. Origin of Indian civil aviation industry India occupies an eminent position in the civil aviation sector with a large fleet of aircrafts. Estimates show that the domestic and international passenger traffic in India is growing tremendously PEST ANALYSIS – AIRLINE INDUSTRY Political Factors India’s political environment – Tension with Pakistan, Government’s inability to control issues (riots etc) September 11 th - huge drop in air traffic due to safety and security concerns Trade relations with other countries have to be good Economic Factors Recession- airlines are considered as a luxury High operation costs due to low demand resulted in laying off employees Social Factors People from varied income groups have to be catered Destination, kinds of food served have to be chosen carefully Technological Factors Use of Internet- online ticket booking, updated flight information & handling of customer complaints restructuring the existing airports to world class appeal Porters 5 forces Threat of New Entrants is low The airline industry is so saturated...
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...try to throw lights on some major reasons which were somehow responsible for the current crisis going inside the kingfisher Airlines which can be realized by the press statement from KFA, on 12 March 2012, highlights the challenges: “The flight loads have reduced because of our limited distribution ability caused by IATA suspension. We are therefore combining some of our flights. Also, some of the flights are being cancelled as a result of employee agitation on account of delayed salaries. This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities. We are making all possible efforts to remedy this temporary situation.” RESEARCH OBJECTIVE: The key objective of this research study is to investigate the reasons behind the failure of the Kingfisher airline in the year 2012. To investigate the government policies and the various steps taken to fix the current crisis. To investigate the reasons due to which the whole Aviation Industry is suffering from higher operating losses. What went so terribly wrong with Kingfisher when rival Jet Airways has comparatively much higher debt? INTRODUCTION: Global aviation industry is passing through challenging times due to unprecedented fuel price hike during the last 4 years, turbulent financial markets and economic recession. Vijay Malaya’s dream bird, Kingfisher Airlines - popularly known as The King of Good Times - is witnessing its worst phase. Indian domestic aviation is suffering from a serious...
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...throw lights on some major reasons which were somehow responsible for the current crisis going inside the kingfisher Airlines which can be realized by the press statement from KFA, on 12 March 2012, highlights the challenges: “The flight loads have reduced because of our limited distribution ability caused by IATA suspension. We are therefore combining some of our flights. Also, some of the flights are being cancelled as a result of employee agitation on account of delayed salaries. This situation has arisen as a consequence of our bank accounts having been frozen by the tax authorities. We are making all possible efforts to remedy this temporary situation.” RESEARCH OBJECTIVE: The key objective of this research study is to investigate the reasons behind the failure of the Kingfisher airline in the year 2012. To investigate the government policies and the various steps taken to fix the current crisis. To investigate the reasons due to which the whole Aviation Industry is suffering from higher operating losses. What went so terribly wrong with Kingfisher when rival Jet Airways has comparatively much higher debt? INTRODUCTION: Global aviation industry is passing through challenging times due to unprecedented fuel price hike during the last 4 years, turbulent financial markets and economic recession. Vijay Malaya’s dream bird, Kingfisher Airlines - popularly known as The King of Good Times - is witnessing its worst phase. Indian domestic aviation is suffering...
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...double the amount of their largest competitor, United Technologies. Boeing and their competitors have seen a sharp increase in fuel prices and airlines around the globe have a need to renew or expand their current fleets. The overseas exporting market is seeing ongoing recovery, representing the industry’s largest market. This is largely due in part to the American dollar not being as strong as oversees currency, allowing for American made products to be cheaper through exports (imports for buyers). The industry is estimated to grow 2.8% per year up to 2017. With strong domestic and international demand and a decrease in federal funding, Boeing Co., must incorporate technological improvements to drive growth in the next 5 years to maintain their share of the market. With fuel costs on the rise, Boeing will be forced to create airplanes and parts that can be designed to minimize fuel consumption, thus increasing revenue for the company. Airline companies want a product that is more fuel efficient and will utilize any manufacturer that will reduce their overall fuel consumption costs. In order for Boeing to meet their customer demands and to significantly capitalize on this market in the future, they must reinvent their research and development department. Boeing is the future and must envision the future. Although the airline industry has a limited array of companies to choose from when ordering...
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...Introduction Malaysia Airlines (MAS) is the Malaysia national air carrier. It was incorporated during the early days of air travel in 1937. From a humble beginning, MAS has developed into a renowned international airline with award-winning products and services. MAS has gone through several changes in its management over the years and still survives. For the Financial Year (FY) 2005, MAS reported a loss of over RM1.3 billion (Appendix 1). This announcement came at the same time as some of MAS regional competitors reported strong profits. On 1 December 2005, Idris Jala was appointed by Government of Malaysia as MAS Chief Executive Officer (CEO) to resolve issues affecting the MAS’s cash flow to enable it to meet its fuel bills and operation requirements by April 2006. In addressing this issue and in view of these challenges, MAS under new CEO had taken a radical approach in its operation and had formulated a business plan in the year 2006 called Business Plan Turnaround (BTP1), which outlines their imminent recovery plan to achieve better financial performance as well enable it to not only realize operational profitability but also ensure business sustainability. BTP serve as a platform for future growth of MAS. Under the various initiatives, launched together with the BTP1, MAS switched from losses to profitability between FY 2006 and FY 2007. When the BTP came to an end, the airline posted a record profit of RM 853 million in 2007, ending a series of losses since 2005. ...
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...To Whom it May Concern; This letter is to express my interest in the position of flight attendant with WestJet as posted on your website. After reviewing the job description, I am confident I have the skills, attitude, and personal experience to integrate effortlessly into the WestJet team. While I have no direct work experience in the airline industry specifically, I do have personal life experience, and a work and educational background that I believe you will find invaluable. As per your requirements: ▪ I am 5'6", neat and well groomed, and accustomed to meeting strict uniform standards. ▪ I have excellent written and oral communication skills. ▪ I am committed to ongoing improvement and professional development. ▪ I am able to travel away from home, work long hours, any time of day, 7 days a week, 365 days a year. ▪ I am fit, athletic and able to meet the challenges of a physically demanding job. ▪ I am tolerant, polite and enjoy working with people from diverse backgrounds. ▪ I have 11 years experience handling emergency situations with calm, assertive leadership. ▪ I appreciate the need to adhere to safety standards and follow workplace procedures. ▪ I have 3 years experience working as a flight paramedic on a Beechcraft King Air 350 for the BC Air Ambulance Service. ▪ I hold a valid Canadian Passport. As well, to facilitate my transition into this new, dynamic career, I am currently improving my formal education. At present I am taking...
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...• A strategic analysis report relating to Jetstar Airlines o A competitive analysis of the market/s including: A brief description of the history of the company and a history of the main competitors. Include joint venture alliances where applicable. History of the company Jetstar’s mission is to offer all day, every day low fares to enable more people to fly to more places, more often. The Jetstar Group is a value based, low fares network of airlines operating in the leisure and value based markets. The Group consists of: Jetstar Airways in Australia and New Zealand (wholly owned by the Qantas Group). Jetstar Asia based in Singapore. The company is managed by Newstar Holdings, majority owned by Singapore company Westbrook Investments (51 per cent), with the Qantas Group holding the remaining 49 per cent. Jetstar Pacific based in Vietnam (majority owned by Vietnam Airlines with the Qantas Group holding 30 per cent). Jetstar Japan, a partnership between the Qantas Group Japan Airlines, Mitsubishi Corporation and Century Tokyo Leasing Corporation. Jetstar Hong Kong, a partnership between China Eastern Airlines and the Qantas Group (subject to regulatory approval). The Jetstar Group is the largest low cost carrier in the Asia Pacific by revenue and has flown over 100 million passengers since it launched in 2004. In the past financial year ended June 2012, the Jetstar Group carried more than 20 million customers. The Jetstar Group has grown from providing...
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...Ibrahim Osta, Chief of Party. TABLE OF CONTENTS I. II. EXECUTIVE SUMMARY 6 THE ENVIRONMENT IN WHICH KHIA WILL MARKET 1. APPROACH AND RELEVANCE AT KING HUSSEIN INTERNATIONAL AIRPORT 2. SCHEDULED AIRLINES AIR SERVICE PLANNING PROCESS 3. CHARTER SERVICE AND TOUR PROGRAM PLANNING PROCESS 4. AIRLINES’ ECONOMIC DECISION-MAKING CRITERIA 5. PROACTIVE AIRPORT LEVERAGE – Prodding the carriers 6. PRESENTING A COMPELLING DESTINATION MARKETING PROPOSAL 6 13 13 15 17 19 20 21 III. AQABA THE DESTINATION – Issues for Consideration 1. AQABA HOTEL AVAILABILITY 2. AQABA HOTEL ARRIVALS KING HUSSEIN INT’L AIRPORT MARKETING PLAN 1. INTRODUCTION 2. STRUCTURE OF THE KHIA MARKETING STRATEGY 3. KHIA AT A GLANCE 4. CURRENT BUSINESS 5. COMPETITIVE DESTINATIONS / AIRPORTS 6. POPULAR EUROPEAN CARRIERS AIRCRAFT 7. KHIA MARKETING OBJECTIVES 8. KHIA MARKETING RESEARCH FOR DECISION SUPPORT 9. MARKETING CAMPAIGN DESIGN & EXECUTION 10. MAINTAIN TRADE RELATIONS 11. SALES MISSIONS IN SUPPORT OF NEW BUSINESS 12. PR / ADVERTISING & PROMOTION 13. BRANDING 14.ESTABLISH STAKEHOLDER PARTNERSHIP PLAN 15. ACCOUNT MANAGEMENT APPROACH 16.INTERIM MARKETING ACTION KHIA MARKETING DEPARTMENT STRUCTURE 1. STAFFING REQUIREMENT 2. ORGANIZATIONAL STRUCTURE TARGET AIRLINES AND TOUR OPERATORS 1. ROYAL JORDANIAN 2. LCC AIRLINES OPERATING IN / SERVING THE REGION AND PROSPECTIVE TOUR OPERATORS 22 23 25 26 26 27 27 27 34 35 37...
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...Summary and Analysis of Zsidisin &Hartley’s (2012) Managing Commodity Price Risk Summary As every organization and business in the market is exposed to price risks due to the commodity price volatility, it’s imperative for managers to predict those risks and make strategies to mitigate the damages brought by price volatility. This book not only shows us the importance of commodity price management, but also teaches organizations how to adapt and adjust themselves to commodity price volatility and provides approaches to decrease the exposure to risks for managers. Therefore, this book is a necessary one to manage commodity price risk for managers and organizations. Why is the commodity price risk management so important for companies? The book gives us the answer. Since prices fluctuations of goods are based on changes in supply and demand in the market and such fluctuations of prices are out of the direct control of any company, understanding companies’ exposure to price risk and making decisions on how to manage the risk become pivotal to supply chain mangers. The book points out that the risk exposure of business might be impacted directly by purchases of raw materials and indirectly by costs from energy and transportation. According to the authors, commodity price volatility affects industries’ performance both negatively and positively. It is obvious that fluctuations of raw materials or transportation cost can directly influence the profitability of companies...
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