May 9th, 2005 at 6:05 AM was a special moment for Vijay Mallya. His new airline’s maiden flight had just taken off. Flying from Mumbai to Delhi, the A320 was decked out with luxuries and frills like the Indian aviation market had never seen before. “Everything is going to change,” Vijay Mallya declared proudly. “Kingfisher will provide an unparalleled in-flight experience.”
He made other declarations too. “Having invested in the best-in-class fleet of aircraft, we are committed to achieving our ambition of making Kingfisher Airlines, India’s largest private airline both in capacity and market share by 2010,” and “We expect Kingfisher Airlines to be profitable in the very first year of operation given its strategic approach to control costs, deployment of technology and outsourcing,” were some of the ways in which he expressed how gung-ho he was about the new airline. Of his declarations, only the first came remotely close to being true.
Kingfisher was revolutionary in terms of Passenger Experience in the Indian aviation sector. It led the pack in terms of in-flight entertainment and in-flight comfort. Kingfisher also led the pack in terms of social media presence – bringing the Indian aviation sector into the 21st century. The airline succeeded in creating a powerful brand, with the bold red color, attractive staff, and “good times” being positively associated with Kingfisher Airlines.
The airline became incredibly popular fairly quickly. With reasonable fares and a differentiated product, Kingfisher was the first choice for many loyal passengers. Kingfisher was one of the top airlines worldwide in terms of Passenger Yield (PRASM), commanding premium ticket prices over its competitors. However, its costs were also very high due to the frilly product, and Kingfisher struggled to make a profit. Far from making a profit the very first year of operation as Vijay Mallya was hoping, the airline has never made any profit to date.
Last year, Kingfisher reached its peak in terms of passengers carried. While not the first in capacity or marketshare as Vijay Mallya was hoping, the airline had grown incredibly fast, both organically and through the purchase of Air Deccan. At the end of last year, however, Kingfisher was showing signs of stress. The purchase of Air Deccan had left them with a massive debt-load and their foray into the LCC segment had given them a muddled brand. After 6 years of never making a profit, they couldn’t afford to pay their operational bills.
We all know what happened a few months ago. Kingfisher slashed its fleet drastically, cut routes, and pulled out of major airports like Kolkota and Hyderabad. Industry analysts almost unanimously predicted that the downfall of Kingfisher was closeby. To the shock of many, myself included, Kingfisher is still operating today.
And for that reason, a warm happy birthday is in order. Not every airline can drag out its survival so much.
Happy Birthday Kingfisher Airlines!