4 Reasons Why Kingfisher Airlines Failed

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24 Feb 2022
4 min read

Post Highlight

Vijay Mallya, the owner of Kingfisher, had extensive brewing experience. He has earned the title of "liquor baron." He lacked experience running businesses like airlines, despite his expertise in that field. As a result, he was unable to provide inspirational and effective leadership to the Kingfisher team. He made two crucial decisions within a few years after founding KFA. In this blog, we'll discuss why did kingfisher airlines failed. #TWN

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Kingfisher Airlines Failure

It's difficult to start an airline firm, but it’s even more difficult to keep it going over time. Kingfisher, dubbed "The King of Good Time," was a major passenger airline. It was founded in 2003 by United Breweries Group, a Bengaluru-based corporation. They quickly rose to become India's fifth-largest passenger airline, offering clients domestic and international flights at competitive prices. Kingfisher's owner, Vijay Mallya, had extensive experience in the brewing industry. He has become known as a liquor baron. Despite his expertise in that field, he lacked experience operating businesses such as airlines, which led to the failure of kingfisher airlines.

These are the some of the important reasons why Kingfisher Failed-

  • Acquisition of Air Deccan

  • Expansion in The International Arena

  • Lack Of Stability at The Apex Level of Management

  • Switching from Premium Class Airline to the Low Budget Segment

Acquisition of Air Deccan

The first was the acquisition of Air Deccan, a low-cost carrier. Even though KFA inherited all of Air Deccan's aircraft and market, the latter also inherited its losses.

Expansion in The International Arena

Another choice that impacted KFA's efficiency was the quick launch of abroad services. After acquiring Air Deccan, KFA entered the international market. This entrée into a big market would have been fantastic after consolidating the domestic service, which had by then grabbed a significant portion of the Indian market. KFA's international attempt was a dismal failure. That was always going to be the way it was going to be. In the rough waters of international competition, how could a man with no domestic airline experience succeed? Emirates and Etihad, for example, dominated the international skies and had a loyal following. It was too difficult for the nascent KFA to break its monopoly, and it failed.

Lack Of Stability at The Apex Level of Management

A lack of continuity at the top of an organization is another element leading to KFA's downfall and dissolution. KFA's owner, as previously said, was a newcomer to the aviation industry, and the CEO was in charge of the company's direction. No CEO, on the other hand, stayed at KFA for more than a year. If KFA had hired an experienced CEO like Gopinath of Air Deccan and kept him for the full five-year term, things might have turned out differently. Malley's commercial interests, aside from breweries and KFA, were numerous and desperate. Because the breweries were handled by qualified employees, his booze company boomed. KFA, on the other hand, did not have the same luck. Due to his political ties (Vijay Mallya was a Rajya Sabha Member of Parliament)

Switching from Premium Class Airline to the Low Budget Segment

KFA grew well-known as a premium airline that catered to the needs of high-ranking business executives and politicians. Over a short period, it steadily built up its brand. However, it lost its luster when it entered the low-cost market. The low-cost market was not easy to navigate. The market was dominated by Indigo, SpiceJet, and other competitors. It was difficult, especially in the domestic market. The competition was strong, and KFA's aspirations of making a quick buck were dashed. KFA's service deteriorated over time, and consumers shifted their loyalties to other airlines.

Conclusion

The team's inability to make good decisions has led to KFA's demise as one of India's greatest airlines. The acquisition of Air Deccan, the service's rapid entry into the international arena, and its shift in segments, which prompted rivalry, were all important factors in its demise. External issues like the high price of aviation fuel could also be to blame. The cost of fuel for KFA continued to rise. All airlines, including KFA's competitors, have faced this problem, but they have devised tactics to overcome it.

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