Kingfisher Airlines- what went wrong?

When the word Positioning is used in context with marketing, it means promoting a product, service or business within a particular sector of a market, or the fulfillment of that sector's specific requirements. It relates to strategy, in the specific or tactical development phases of carrying out an objective to achieve a business' or organization's goals.

Positioning is the part of a larger process which also included Segmenting, Targeting and Differentiation but in this article, we will be specifically talking about Positioning as a concept, which will also be explained with a few examples. Lastly, this article will also have an example explaining how Positioning can go wrong and affect the company in a major way.

On its launch, Kingfisher was classified as one of India’s most luxurious commercial airlines, along with the likes of Jet Airways. These airlines had tickets starting at ₹ 6,000. Of course, six thousand was the bare minimum.

Apart from this set of high-price airlines, there was another set of airlines- the low prices carriers. This set included Air Deccan, Spice Jet, Go Air, etc.

Kingfisher Airlines had it all and why wouldn’t it, with an owner like Vijay Mallya?

To describe that man in one word would have been easy; extravagant. The reason behind using this word to describe him would be the kind of lifestyle choices he made, one of the top ones being the choice to gift his son an Airline for his birthday. Yes, Kingfisher Airlines was a gift from him to his son, Siddhartha Mallya on his eighteenth birthday.

So Kingfisher Airlines used to offer the best services to the flyers; the food, the interiors of the plane, the on-flight-entertainment, the goodies that came along with the purchase of our ticket (remember the pouch, anyone?). Taking into consideration all of this, it was only natural for the airline to charge sky-high fares, which people even paid willingly. A large number of people, at that.

Now, let’s look at the other part of this article; Air Deccan.

A newly introduced airline, Air Deccan was an instant hit, the reason being the ridiculously low air fare. They initially even had tickets starting at Re. 1, excluding taxes of course. After considering the taxes and the added expenses, the fare totaled up to ₹ 900 – ₹ 1000.

As it happened, Kingfisher acquired Air Deccan and re-named the airlines Kingfisher Red; this was a low cost class which operated on domestic routes. After the acquisition, nothing about Kingfisher Red or as it was previously known, Air Deccan, remained low-cost. It was the most luxurious airline amongst all of the low cost carriers. Tickets which initially used to cost somewhere around ₹900 - ₹1,000 had started costing approximately ₹5,000.

Here’s the catch- the services of Kingfisher Airlines and Kingfisher Red were almost similar, or maybe fully similar. You’d never know. Their services were so similar that people started migrating to Kingfisher Red from Kingfisher Airlines. After making this move, they received the same services that they used to earlier, except, this cost half the price.

The passengers that earlier used to pay somewhere around ₹10,000 had started paying approximately ₹5,000 for the same services. Good for the flyers, I’d say. For the airlines? Not so much.

Also, all those people who used to travel by Air Deccan didn’t see the point in paying nearly ₹4,000 extra to travel in Kingfisher Red, which is why they migrated to the next low-cost carrier.

Kingfisher’s revenue came down faster than a free-falling object, all of which caused them to get into heavy losses. Kingfisher’s market position in the top Indian airlines had slipped from #2 to last because of the financial losses faced by them.

In a way, Kingfisher Airlines caused its own end. Somewhere between the hopes of earning more and building another airline similar to their maiden venture into the industry, Kingfisher lost out.

They should’ve considered the changes more carefully before initiating them (or not?), eh?

This is a pretty simple thought process, to be honest, but then again, they didn’t think it through.

Better luck next time, Kingfisher.

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