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Case Title:

Kingfisher’s Acquisition of Air Deccan: Altering India’s LCC Scenario?

Publication Year : 2010

Authors: S Sakariya, D Parmar, J Thadamalla, K Suresh

Industry: Transportation

Region:India

Case Code: MAA0196IRC

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
India's first 'no-frills' low cost carrier (LCC), Air Deccan has changed the landscape of the Indian domestic aviation market since its launch in 2003. It succeeded in making air travel relatively more affordable to the 'common man' and became popular among neo air travellers with its low air fares. By 2007, Air Deccan became a flag bearer of the LCC segment which captured a 45% market share of the air travel market in India. Kingfisher Airlines, a full service airline, and Air Deccan entered into a strategic alliance, while continuing to operate as separate entities following different business models. Kingfisher later increased its stake to 46%, and took control of the management of Air Deccan, upgrading it to a value-based airline with higher airfare and repositioned it as 'Simplifly Deccan'. Following the merger of Deccan with Kingfisher, in August 2008, Kingfisher renamed Deccan as Kingfisher Red, withdrawing the pioneering LCC brand. With skyrocketing fuel prices and losses year on year, industry analysts were sceptical about the future of LCCs in the Indian aviation market.

Pedagogical Objectives:

  • To understand the importance of branding and repositioning
  • To understand the impact of brand transition on loyal customers.

Keywords : Dynamics of Indian aviation market, What is low cost carriers?, LCC business model in India, Competition in India aviation market, LCCs in India vs other countries, Consolidation in Indian aviation market, Acquisition of Air Deccan, Air Deccan: Transition to Kingfisher Red, Brand transition strategy, Growth strategy of Kingfisher Airlines, End of Deccan brand, How to kill a leading brand?, Future of LCCs in India, Future of Kingfisher Red, Opportunities and challenges in Indian aviation market

Contents : 
Indian Aviation Market – LCC
Air Deccan Fares Vs Indian Rail Fares
Competitions between LCCs vs FCCs
Air Deccan: Transition to Kingfisher Red
The Shrinking of LCCs in India
Why the Domestic Airline Operators Not Making Money in India?

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