Kingfisher airline

Background to organisation:

Kingfisher airline is a private airline owned by Vijay Mallya of United Beverage (UB) Group. It is based in the southern city of India, Bangalore. The UB Group is India’s largest manufacturer of beer and spirits. Kingfisher Airlines started its operations on the 9th of may, 2005. It began with a fleet of 4 airbus A320 aircrafts. Its first flight was from Mumbai to Delhi.

Since its launch in May 2005, Kingfisher Airlines has introduced a range of market-firsts that enabled them to capture the attention of air travelers. By considering its customers as ‘guests’ and not just passengers, kingfisher Airlines has won the hearts of customers. On the 19th of December 2007, Air Deccan and Kingfisher Airlines decided to merge. Kingfisher Airlines’ parent company United Breweries(UB Group) have acquired 46% of Air Deccan’s parent Deccan Aviation, which possesses 52% of the total stakes.

Kingfisher operates more than 400 flights a day and has a network of 78 regional and international destinations. International operations started on the 3rd of September 2008, with its maiden flight from Bangalore to London. In May 2009, Kingfisher Airlines has the highest market share among airlines in India by carrying more than a million passengers.

A United Kingdom based independent research and quality evaluation body for airlines– Skytrax, has conferred the prestigious 5-star airline status on Kingfisher Airlines. A 5 star status recognizes an airline with the highest standard of product across several stringent quality assessment categories and one that consistently delivers high standards of service in on-board and airport environments. This honor makes Kingfisher Airlines one of only 6 airlines in the world to have a 5 star rating. Kingfisher Airlines is the only 5 star certified airline in India and the only domestic airline in the world to receive a 5 star rating.

(http://www.makemytrip.com/flights/kingfisher_airlines-history.html)

(http://www.suhailbahwangroup.com/index.php?option=com_content&view=article&id=88%3Akingfisher-airlines-5-star-celebrations-&catid=17%3Anews-a-events&Itemid=6&lang=en)

Mission Statement:

We constitute a large, global group based in India. We associate with world leaders in order to adopt technologies and processes that will enable a leadership position in a large spectrum of activities.

We are focused on assuming leadership in all our target markets.

We seek to be the most preferred employer wherever we operate.

We recognize that our organization is built around people who are our most valuable assets.

We will always be the partner of choice for customers, suppliers and other creators of innovative concepts.

We will continually increase the long-term value of our Group for the benefit of our shareholders.

We will operate as a decentralized organization and allow each business to develop within our stated values.

We will be a major contributor to our national economy and take full advantage of our resource base.

We commit ourselves to the ongoing mission of achieving Scientific Excellence.

(http://www.theubgroup.com/missionstatement.html)

SWOT analysis of Kingfisher Airlines:

Strengths:

First airline in India with full new fleet of aircraft.

Unmatched in-flight service.

Route rationalization.

Weakness:

Highly priced for the service offered.

Yet to break-even.

High attrition at the top brass.

Opportunities:

Under penetrated domestic service.

International markets.

Untapped air cargo market.

Expanding tourism industry.

Fleet size expansion.

Threat:

Existing operators.

Infrastructure issue.

Fuel price hike.

Economic slowdown.

Bullet trains to be introduced.

Description of nature of Information Systems:

Information system: An information system can be defined technically as a set of interrelated components that collect (or retrieve) process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products. (Kenneth C Laudon, Jane P.Laudon; 1997)

Kingfisher Airlines, one of India’s fastest-growing airlines, has chosen Sabre Airline Solutions to provide a full suite of more than 20 enterprise applications to enhance its guest processing functions, as the airline continues its rapid expansion of its operations. With the implementation of Sabre Airline Solutions’ passenger reservations and departure control systems, the SabreSonic Passenger Solutions, Kingfisher Airlines will be able to manage its reservations, pricing, ticketing and reporting more efficiently.

Kingfisher Airlines is also among the first in India to offer the latest range of check-in options for its guests, including “web check-in” facilities and “Roving Agents” that use mobile devices to check in guests to help alleviate check-in queues at airports.

Kingfisher Airlines’ entire suite of Sabre Airline Solutions products is fully hosted through Sabre eMergo web access, an application service provider environment that provides the technology without the cost of acquiring and maintaining costly hardware and infrastructure systems.

Kingfisher Airlines is also leveraging other technology from Sabre Airline Solutions to help analyze the market and determine the best approaches to maximize revenue, including Sabre AirMax Revenue Manager, the Quasar passenger revenue accounting system and the SabreLoyalty Suite. To optimize operations, Kingfisher Airlines is also leveraging the Sabre AirOps Flight Operations Suite and the Sabre Rocade Crew Management System.

Through a separate deal, Kingfisher Airlines has also become the first new-entrant carrier in India to distribute its inventory through the Sabre global distribution system (GDS). It signed a Direct Connect Availability (DCA) agreement, the highest level of participation in the Sabre system. With this, Kingfisher Airlines can now market and sell its products through all Sabre connected travel agents globally.

Functional use of information systems:

In order to function, airlines must deal with many different pieces of information about customers, employees, payments, products & services etc. They must organize work activities that use this information to operate efficiently and enhance the overall performance of the company. Information systems make it possible for firms to manage all their information, make better decisions, and improve the execution of their business processes.

To a large extent, the performance of a business firm depends on how well its business processes are designed and co-ordinated. Kingfisher Airlines entered into a strategic partnership with Sabre Airline Solutions to provide the depth and width of application solutions to ensure airline management best practices. Kingfisher Airlines’ information system functionally concerns with:

.

Marketing:

Airlines need to plan and analyze data, to determine how to best offer their schedule to customers and make the most revenue. With the implementation of Sabre Airline Solutions, Kingfisher Airlines has got systems in place to deal with Fares Management, Revenue Management, Planning and Scheduling etc. Industry experts state that effective use of an automated pricing system can add a 1% revenue improvement. The return on investment model validates this and generally shows approximately 1.5% revenue improvement for an airline using this system in a competitive fare environment.

Selling:

Airlines increase sales by enhancing their ability to reach customers through their preferred distribution channels. Sabre Airline Solutions provided kingfisher Airlines with a real-time interface solutions preferred by travelling companies worldwide for reservations, ticketing, check-in and a multitude of other business functions. These applications are designed to give customers the ability to create highly customized front ends to real time host systems, databases, peripheral devices and other information sources using a simple yet robust application development tool. These solutions help a business realize a return on investment in as few a three months.

Serving:

Turning customers into advocates is a key component in building a successful customer-centric business strategy. The success of airlines is heavily dependent on delivering a positive customer experience. Setting reasonable expectations, delivering on these expectations, and then collecting real-time feedback in order to learn from customers will be the key mechanism for improving a customer experience. The Sabre Airline Solutions offer systems to improve the travel experience and ensure customer satisfaction, making it easy for travelers throughout their journey.

Operating:

When a customer purchases ticket on an airline, a promise is made to that customer. It is a promise to get the customer from point A to point B as close to on-time as possible. It is the responsibility of the airline’s operations to deliver on the promise made. Sabre Airline Solutions helps deliver the promise at the lowest operating cost. Using the operations solution allows optimizing the span of operations with flexibility and choice by deploying solutions that:

Helps seamlessly and effectively control the operations.

Optimally manage change from planning to execution.

Enables to provide the desired customer experience.

(http://www.sabreairlinesolutions.com/)

Human Resource: Airlines have a human resource function that handles tasks concerning the personnel resource of the organisation. The human resource function is responsible for attracting, developing, and maintaining the firm’s workforce. Human resources information systems support activities such as identifying potential employees, maintaining complete record on existing employees, and creating programs to develop employees’ talent and skills.

Finance and accounting: The finance function is responsible for managing the airlines financial assets, such as cash, stocks, bonds, etc. The finance function is also in-charge of managing the capitalization of the firm. To determine whether the firm is getting the best return on investments, the finance function must obtain a considerable amount of information from sources external to the firm.

(http://www.flint.umich.edu/~weli/courses/bus181/notes/chap2.html)

No wonder Kingfisher Airlines has won many major awards like “NDTV Profit Business Leadership Award for Aviation”, “Service Excellence for a New Airline”, “India’s No.1 Airline in Customer Satisfaction” etc. It’s all because Kingfisher Airlines has opted to invest in Sabre Airline Solutions, the industry that provides the best information systems available in the market.

(http://www.flykingfisher.com/about-us/achievements.aspx?locale=en-UK)

Constituency use of information systems:

Depending on the functions, levels, specialties, and interest in an organisation, there are various types of information systems. An organisation can be divided into strategic (senior), Middle and operational levels. People in the organisation have unique information needs and thus require various set of IT tools. Information systems are built to serve these different organizational levels.

Senior management makes long-range strategic decisions about products and services as well as ensure financial performance of the firm.

They need systems that address strategic issues and long term trends, both in the firm and in the external environment.

Executive support systems (ESS) help senior management make these decisions. ESS addresses non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. ESS present graphs and data from many sources through an interface that is easy for senior managers to use.

ESS, for example, serves the purpose of predicting labour needs for years to come. This enables Kingfisher Airlines to evaluate labour needs and hence access labor needs in years to come.

Middle management carries out the programs and plans of senior management. They need systems to help with monitoring, controlling, decision-making, and administrative activities. The principal question addressed by such systems is this: Are things working well?

Management Information Systems (MIS) provide middle managers with reports on the organization’s current performance. This information is used to monitor and control the business and predict future performance.

Management Information Systems is an arrangement of data processing and information systems in an orderly manner to support the management in achieving the business objectives. It is designed to provide the information which is exceptional in nature from the point of view of business. By nature, MIS is an open system interfacing continuously with the internal and the external environment and is self organizing to meet the ever increasing and changing needs of the organisation.

Decision-support systems (DSS) support non-routine decision making for middle management. They focus on problems that are unique and rapidly changing, for which the procedure for arriving at a solution may not be fully predefined in advance

MIS, for example, records how many training and development program was held during the year, select new employees and provide training etc. This enables Kingfisher Airlines to get information about the training programmes and can identify the knowledge that the new employees has about the work. Thus, Kingfisher Airlines can get good employees with proper skills, which will help to reduce unnecessary costs.

Operational managers need systems that keep track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory.

Transaction Processing Systems (TPS) provide this kind of information. Transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business.

TPS, for example, serves the purpose of recording employee’s attendances, employee holidays, complains that arises for the food they provide etc. This enables Kingfisher Airlines to clearly get the record of employee’s attendances, holidays, food quality etc. This enforces Kingfisher Airlines to act on providing extra employees and also change food depending on customer preference.

(Kenneth C Laudon, Jane P.Laudon; 2007)

Recommendations:

Upgrade the system up-to the maximum possible level to ensure the privacy of the customers.

System failure does happen. So dependable alternatives to deal with system failure is very important.

Keep in pace with the advance security system.

The whole idea of information system is to increase efficiency and save costs. This results in higher profitability. The profit should be returned back to the customers in the form of lowering air fares

The company is yet to reach break-even point. The top level executives should consider getting into break-even point before they can invest anymore on information systems.

Conclusion:

In airlines industry, the pressure to provide better customer service has never been greater. Yet the pressure to reduce operating costs is equally strong. To meet these challenges, there are plenty of software solutions that help airports, airlines and ground handling companies distinguish themselves by making travel more convenient and easy. Kingfisher Airlines has stylishly entered the market only a few years ago and is now one of the most popular airlines in India. This is due to the service they provide using the latest and best software solutions available in the market.

Despite not reaching the break-even point in the business, Kingfisher Airlines has invested and is investing in the latest information systems with the hope that it will pay back in the long run, knowing that a good information technology enables operations to run successfully, while emphasizing customer service. Technology has the potential to answer the demands of politicians and the travelling public – increasing the level of security, without creating excessive time delays and without adding significantly to the cost of capital.

No doubt, the research on these topics will go on as the industry continues to evolve in the future.

References:

Kenneth C. Laudon, Jane P. Laudon (2007), Management Information Systems, 10th edition.

Kenneth C Laudon, Jane P.Laudon; (2008), Management Information Systems, ‘How Businesses Use Information Systems’, pp 81.

http://www.flykingfisher.com

http://www.airlines.co.in/kingfisher-airlines-in-india.htm

http://www.flint.umich.edu/~weli/courses/bus181/notes/chap2.html

http://www.flykingfisher.com/about-us/achievements.aspx?locale=en-UK

http://www.mapsofindia.org/airlines-in-india/kingfisher-airlines.html

http://www.indiamarks.com/guide/Kingfisher-Airlines-A-Class-Above-the-Rest/629

http://wapedia.mobi/en/Kingfisher_Airlines#1.

http://www.theubgroup.com/chairmanstatement.html

http://www.chinahospitalitynews.com/en/2007/02/12/3109-kingfisher-airlines-signs-sabre-airline-solutions-deal/

http://www.sabreairlinesolutions.com/products/market/airmax.htm

http://biztech2.in.com/india/casestudies/web/kingfisher-airlines-flies-high-with-web-enitiatives/5421/0

http://www.redorbit.com/news/business/668901/sabre_airline_solutions_and_responsetek_unveil_customer_experience_manager_system/index.html