Increasing labour costs, shortage of skilled pilots, increasing fare prices, high tax structure, low percentages of non-aeronautical revenues and escalating debt became an industry wide problem and most of India’s private airlines were sent into red zone. Due to economic recession, unmatched fuel price climb, turbulent financial markets the Global aviation industry was going through challenging times.
After liberalization in mid 90s, The Indian airline industry showed a significant growth because of entry of private service airlines. The number of jobs in the Airline sector had gone up since there were more airlines coming into business in India. Many students started signing up for courses for Pilots, ground crew and flight attendant training …show more content…
There were constant changes in the top management and Vijay Mallya hardly took any interest in the daily operations of the company and above all the company was gifted to his son Siddarth Mallya who dint have any experience nor expertise in this industry hence this lack of proper management caused the downfall of the company.
• Expansion and Acquisition of Air Deccan: for the sake of expansion and for the sake of international route license. Kingfisher acquired the Air Deccan, without trying to associate the two companies and improve their profits with their merger. KFA stepped into international routes without first stabilizing in the domestic market; Acquisition and expansion are two factors started throwing kingfisher into downfall.
Air Deccan already had losses of about 550 crore. A reason for acquiring Deccan was to also get international flying license and Vijay Mallya thought this would also give a global stage for its beer brand , but this did not happen
• Constant change in focus: When it comes to running an airline it is important to have a clear long term strategy and focus. Frequent changes did not help the airlines and it got hit badly by many external factors. Kingfisher started with a full service carrier then added a low cost model and finally went back to its initial
After liberalization in mid 90s, The Indian airline industry showed a significant growth because of entry of private service airlines. The number of jobs in the Airline sector had gone up since there were more airlines coming into business in India. Many students started signing up for courses for Pilots, ground crew and flight attendant training …show more content…
There were constant changes in the top management and Vijay Mallya hardly took any interest in the daily operations of the company and above all the company was gifted to his son Siddarth Mallya who dint have any experience nor expertise in this industry hence this lack of proper management caused the downfall of the company.
• Expansion and Acquisition of Air Deccan: for the sake of expansion and for the sake of international route license. Kingfisher acquired the Air Deccan, without trying to associate the two companies and improve their profits with their merger. KFA stepped into international routes without first stabilizing in the domestic market; Acquisition and expansion are two factors started throwing kingfisher into downfall.
Air Deccan already had losses of about 550 crore. A reason for acquiring Deccan was to also get international flying license and Vijay Mallya thought this would also give a global stage for its beer brand , but this did not happen
• Constant change in focus: When it comes to running an airline it is important to have a clear long term strategy and focus. Frequent changes did not help the airlines and it got hit badly by many external factors. Kingfisher started with a full service carrier then added a low cost model and finally went back to its initial