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Kingfisher Airlines is not a marketing failure

7 28

The King of Good Times is literally going through Bad Times. Kingfisher Airlines (KFA), that was launched in 2005 with much fanfare was termed as the “first full frills – true value carrier” and one word that people associated it with is “Experience”. However, today, the experience is turning out to be a nightmare for both Dr Vijay Mallya and the passengers, with flights being grounded, pilots, cabin crew and ground staff on a mass exodus due to non-payment of salaries for months. While Dr Mallya is in talks with all – banks, government and foreign airlines to resurrect the sinking airlines, there are questions being raised if KFA was a marketing disaster?

The answer is simple ‘No’. Dr Mallya has lived a life in style and wanted his passengers to fly in style. He provided the means for that. The company had identified over 300 touch points – right from the first brand contact via travel agent or its website to smartly dressed Kingfisher help (read baggage handlers or valet service) at the airports to the entire in-flight experience with Live TV and meal offering with about six different types of choices on the menu. All this lead to its promise: ‘Experience’.

Market segmentation was right – SEC A, SEC B in the age group of 25-45 years and married young professionals with kids in the age group of 20-35 years with an annual income of more than Rs 7 lakh and were aspirants of flamboyance. An all women in-cabin crew, Oops! Flying Models wore designer red short dresses. Advertising was at its peek. Deepika Padukone was hired as the face of the brand.

Amidst all this, Jet Airways was “made” to change.

So if everything was right, what went wrong? KFA is more of a business failure than a marketing failure. The only marketing failure I can find out in the entire gamut of things was the takeover of Air Deccan and formation of Kingfisher Red and thereby diluting the brand value, KFA stood for.

Going from A to B still
At the outset, Dr Mallya wanted to change the thought or wanted us to believe that airlines were no more a means of going from place A to B. Even after almost seven years after KFA’s existence, airlines still remain a mode of transport from place A to B. I would like to believe that CEOs of multinationals like HUL, P&G, RB and the likes travel first class. I was proven wrong by one of the CEOs of the mentioned companies who was travelling economy class from Delhi to Mumbai last month.

In-flight interruption
Unlike road or rail transport, where there’s much of scenery around to keep you busy, flights are usually boring. Much of the travel through flights between metros is covered in less than two hours. In-flight entertainment or a movie is started only after the seat-belt signs are off. And then there’s interruption of meals being served. Most passengers on domestic flights are not looking forward to in-flight entertainment. They want to reach their destination on time. In-flight entertainment can be handy for a weary traveller on international circuits only.

While from a marketing perspective, offering in-flight entertainment to keep one busy for two or more hours was/is a smart move, it adds up to infrastructural costs. A tie-up with DishTV for live entertainment meant installation of more than 50 customised dishes on aircrafts. Currently, Kingfisher has 64 aircrafts. Add to it the LCD costs installed on each seats and the ear phones given away free.

Porter baggage
As it covered about 30 destinations, and hypothetically speaking if it has even five groundsmen for valet service at each airport – that means 350 people assigned for the job. Hypothetically again, if their salaries are a minimum of even Rs 10,000 per month, that means a monthly expenditure of Rs 35 lakh just for valet service. But I am sure, the workforce for the job must be much larger than the hypothesis and the salaries too must be much higher than assumed.

Fair fares?
While KFA truly offered a premium and luxury service it took pride in calling itself a budget airlines. It refrained itself from calling itself an LCC (Low-cost-carrier) as its fares while were higher than the LCCs, it kept its fares lower than Jet Airways, Indian Airlines (now Air India) and the erstwhile Sahara.

Burning fuel
Amidst this all, Dr Mallya forgot that he was operating in a business where fuel costs are variable and taxes are discretionary. Add to all this the costs of high-blitz advertising, including the deal with Ms Padukone, putting up exclusive lounges at airports, gourmet cuisine, tele-booking centres, the expansive and expensive frills (touch screen seat controls, sensuous mood lighting, unique starry sky, in-seat chargers, in-seat massagers, an exclusive amenity kit and facilities like jacket ironing, music streaming through Bose noise cancellation headphones) in Kingfisher First… aircraft costs, acquisition costs of Air Deccan… and what not. It was a clear case coming true of the Indian proverb: Aamdani atthani, kharcha Rupaiya.

How to fly smart!
On the other hand, Indigo, is one success story, which more than on the frills concentrated and boasts about its on its on-time service, and that has paid it dividends. While KFA decided to fly “five star”, Indigo flies ‘Smart’. And boasting about being more than 95 per cent time on-time, still tells the story that airlines In India still are a means of going from place A to B and there’s a long way to go before the Indian fliers would fly for an ‘Experience’.

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7 Comments

  1. Vijayan Murthy March 3, 2012 at 2:22 PM - 

    Possible solutions for KFA’s existing issues:

    1. KFA can look out for some joint ventures (like the way Spice Jet had investments from Sun Group – Leading media in south) from a different business where in they’re ready to take some 10 to 15% stake in KFA.

    2. Short term plan – to make employees work on hourly basis, so that they’re not paid on a monthly salary. Basically who’re working as support staffs can be put under this scheme, so whenever there is more traffic / flight scheduled we’ll use more man power and less people during less flights.

    3. Instead of operating to all the existing places, they can increase their frequency to metro towns where they will get considerable passengers{frequent fliers} from business circles. Once they’re out of this scarce fund issue then they can look out for expansion to new destinations.

  2. Maju Kadavan March 2, 2012 at 6:58 PM - 

    I still like to fly in KFA…and I hope all these issues will be solved and they will strike back…”Experience” matters to me

  3. Bitan Chakraborty March 2, 2012 at 6:41 PM - 

    Loved the information, insights and analysis. Great read!

  4. ANA March 2, 2012 at 6:03 PM - 

    Again.. What was the exact reason of the downfall…. M&A? A&M??

  5. Dr. B.M.VITHAL March 2, 2012 at 5:04 PM - 

    STORY IS KNOWN TO EVERYBODY. COMEOUT WITH A SOLUTION IF SOMEONE CAN SUGGEST. OTHERWISE REST ALL IS TIME PASS

  6. Sanmeet Singh Walia March 1, 2012 at 11:25 AM - 

    That exemplifies the importance of consistency, planning and paranoia :P

  7. Nishikant Bohra March 1, 2012 at 9:09 AM - 

    Great Story, but walking on the middle of the road has killed many companies earlier and will continue to do so in future.

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