Case Study: Decline Of Kingfisher Airlines

In the local region, Qantas managed to outweigh its competitor by gaining a toll of 65% compared to its competitor. Evidently this shows Qantas is the number one preferred airlines compared to other competitor airlines like Virgin, Tiger Airways and Emirates airlines. However the situation is not the same in South East Asian region as Qantas only managed to obtain about 15% of market share compared to likes of Air Asia who leads the market share with 60% in this region. Conversely, this is not a concern for the airlines as the airlines managed to generate revenue of 5 billion dollars, with a predicted passenger growth of 4.9% which is equivalent to 2.9 billion passengers by 2034.

As the company grows its flat organisational structure will have to develop to handle the chain of command as well as continue a

Main reasons being huge fixed costs, high fuel costs and tough competition. Apart from these factors the downfall of Air India has been characterized to following major reasons:

Qantas’ financial performance has been very successful in recent years with the business recovering strongly from GFC and a large decrease in revenue to ear 377 million in 2010. The effective financial performance has been the result of effective profitability, liquidity, efficiency, return on capital, good solvency and growth including the establishment of a new airline (jet star).

While it is difficult, to some extent, to evaluate the success of a merger that is only just now entering its final implementation phases, it is known that the objective of that merger was to use the larger route network to attract more business, and that the combined airline would also extract cost savings as the result of increased operational efficiency. The airline had struggled in 2009, with its sales declining, but it recovered in 2010 and 2011. Sales last year were $33.678 billion, up from $21.068 billion the year before. In the past two years, the company has turned a profit, going from $253 million in net income in FY2010 to $840 million in net income in FY2011. Some of this improvement may stem from the impact of the merger. However, the airline industry is highly cyclical, and the past two years have represented economic improvement. Likewise, the losses the company faced in FY2008 and FY2009 were as much the result of the economic downturn as they were internal business factors.

“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’

On February 14, 1997, days before one of the busiest travel times and holidays of the year, thousands of American Airline pilots prepared to walk off their jobs if a deal wasn't made by midnight between the Allied Pilots Association and American Airlines. Passengers worried that they would be stranded and out of money, began to re-book their American flights with other airlines and making other arrangements for travel. Although negotiations were still in progress, American began to prepare for the strike that loomed overhead. They braced themselves by canceling all international flights and several domestic flights which cost them millions in profits. After hours of bargaining with little progress, the Allied Pilots Association called a strike

Air India Limited (Hindi: एअर इंडिया) is the national flag carrier airline of India, flying a worldwide network of passenger and cargo services. Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with

Before going public in 2002, JetBlue has outstanding advantage in the whole industries. Because of the good performance by management team (CEO: David Neelman,President and COO: David Barger ,CFO: John Owen), JetBlue provided good services which include new aircraft, leather seat, free live TV at every seat and high

There are two major strategic issues facing JetBlue. The first is that the company is growing very rapidly. This brings with it a number of critical challenges, such as recruitment and selection, maintaining the corporate culture, and maintaining high service levels. Secondary goals associated with this are maintaining safety standards, finding profitable routes to occupy and avoiding a unionization drive. Growing a company this rapidly is possible given the strong initial financing that the company has, but challenging in that the faster the airline grows, the more difficult it will be to find the right people and the right routes. The company can grow rapidly while plucking the low-hanging fruit but these tasks become more difficult over time.

The airline industry is currently unprofitable; it lost $9.4 billion in 2009 and is forecasted to lose another $2.8 billion in 2010. Analysts agree that, if done properly, merging two airlines into one can reduce capacity in a saturated industry that already has too many planes in the air, and permit the newly merged carrier to cut its employee ranks and consolidate costly operations for services like reservations and gate maintenance. If profits return, the airlines could invest them into improving customer service and possibly waiving fees for baggage and in-flight meals that have frustrated travelers. However, the key words are “if done properly.” Past experience of airlines has shown that consolidation has not always fostered higher prices and profits (Knowledge@Wharton, 2010). For example, in 1987 USAir acquired Piedmont Aviation for $1.6 billion. Prior to the merger, these two comparably-sized firms were among the most profitable carriers in the industry. However, soon after the merger USAir became the least profitable airline and almost went bankrupt. Analysts conclude that the major source of the value destruction in the merger was USAir’s workforce integration strategy. The decision to win labor peace by expending USAir’s more generous work rules and pay scales to

The Airline industry has experienced continual problems with rising costs with both fuel and maintenance which has caused them to increase their fees to the consumers to pay for those rising costs. This paper will help explain what an airline such as Delta does to help alleviate such costs without forcing its consumers to flip the bill through high fees that consist of tickets, baggage fees and food. The costs of doing business in aviation today have spiraled out of control making it very expensive for both airlines and the

Qantas Groups’ performance over the 2007 to 2011 period has been relatively poor mainly as a result of the global financial crisis adversely affecting the firm’s international operations. Strategically, Qantas is likely to continue to dominate the domestic airline industry with the success of Jetstar prompting expansion into the Asia Pacific region. The most significant threats facing Qantas include high fuel prices, the value of the Australian dollar and industrial action. A comprehensive financial analysis reveals that compared to other airlines, Qantas is showing strong signs of recovery despite there being inherent weaknesses in its liquidity. A review of the firm’s annual report revealed the presence of various

In september 2007, kingfisher took over the low-cost airline and renamed it as kingfisher red. Due to this merger, there was cannibalization of the kingfisher airlines. As kingfisher lite was a low budget airline, the customers found the rates of that airline to travel better than its main airlines. Even though after the merger, the company occupied the largest indian airline with 27.5% market share and 30% increase in domestic travel they didn't manage to make any profits. The company focused only on the expansion and not the after effects of

The typical organizational structure of this airline is separated by sales and flight operation, and there is also participation of and communication between the heads of both