Reasons for Downfall for Kingfisher Airlines.

Frequent Changes On Focus :

Kingfisher first launched all economy class with food and entertainment system, later
on, they shifted focus to luxury business class on their aircraft, a lot of air travelers
appreciated the hospitality, aircraft condition and it’s ambiance when Kingfisher focus
was on luxury.

After acquiring the Air Deccan they suddenly shifted focus on low-cost air traveling,
frequent changes in the hospitality and aircraft ambience made travelers lose their
interest in the brand, they didn’t focus on highly profitable routes in domestic area.

Economic downfall :

Another external factor for the Kingfisher downfall is economic slowdown in 2008,
Kingfisher first started it’s international route from Bangalore to London in 2008, same
year recession affected the whole world, which is indirectly affected the air travel
occupancy in international routes, because of the recession, airplane fuel prices
raised, airport charges for landing are very costly in international airports around the
world, all these external factors caused the Kingfisher airlines to downfall.

High Operational Cost :

Operational costs of the airline industry are very high compared to any industry,
companies have to buy the licenses for the routes, companies should invest in the
aircraft maintenance, salaries for the employees are very high.

Airports charges fees for landing and parking, aircraft fuel frequently changes as per
the international crude oil rates, the government collects huge taxes from the airline
companies, there is a lot of competition between airline companies, all these high
operational costs without good profit margin caused the Kingfisher to downfall.
Competition:

Aviation Industry is presently in the state of more supply and

Less Demand. Indigo, Spicejet , GO Air offered comfortable flights at the same time
as Kingfisher did. They were almost as old as Kingfisher Airlines but what new
about them was that they had restructured themselves with time but had
always stayed on course with it comes down to business model. There is still a
big class of people who prefer to travel by Indian Railways and therefore the
strategy of Kingfisher was more suited for the Business class customers. With
the Launch of Kingfisher Red their entry into the Low Cost Carrier (LCC)
segment did not prove to be a success.

Acquisition of Air Deccan:

Kingfisher airlines acquired the Air Deccan for the sake of expansion, as per the
international airline policy, any airlines should have minimum five years of domestic
experience in their respective area to get the international routes license, for the sake
of international route license Kingfisher acquired the Air Deccan, they never tried to
syndicate these two companies to improve their profits with its merger.

Without stabilizing in the domestic market to know the ground realities of the airlines
industry, Kingfisher stepped into the international routes where the competition is
very high compared to the domestic airways, when they planned about the
international routes they hardly have three years of experience, acquisition and
expansion these two factors started throwing kingfisher into downfall.