The Kingfisher Airlines: Castle in Air

Abstract

It is about the indomitable ambition of Mr. Vijay Mallya to create and nurture a new brand of Kingfisher Airlines. Kingfisher’s schizophrenic approach to a business model launched as an all-economy, single-class configuration aircraft with food and entertainment systems. When an airline keeps changing its model and takes to random expansion, there is no time for the airline to stabilise. He attempted to expand aggressively in both international and domestic sectors. The rise in the oil prices, high taxes and other operational costs plunged the airline into deep financial trouble and accumulated debt on its books of over Rs.7000 crore.
The airline had everything going for itself: great brand visibility, loyal customers and a wide network but lacked the undivided attention of Mr. Vijay Mallya and the team of professionals. He should have first consolidated its domestic operations and then introduced international routes because on the foreign routes, the competition only gets bigger.
The case attempts to charts the many twists and turns in the fortunes of the airlines and the unscrupulous pursuit of ambitions by manipulating those in the corridors of power. There were alleged irregularities in the running the airline, the non-payment of staff salaries, huge debts to public sector banks and inability to pay airport operators and tax authorities and finally the insolvency.