This is the detailed PESTEL or PESTLE analysis of Kingfisher Airlines which has been operating in Airline industry. This analysis will cover the impact of political, economical, social, technological, legal and environmental factors on the company. It’s is important for Kingfisher to identify these factors and take them into consideration while formulating & implementing strategies.
Being a part of UB group, the Kingfisher airline started its operations in 2005 but failed badly despite of having the loyal customers, wide network and brand visibility. It has however submitted a rehabilitation plan to take a fresh start. PESTLE Analysis is carried out to understand the risks from various factors which may result in the growth or decline of any company.
Political Factors
Being a toast of the aviation service once, the Kingfisher airline was exposed to various political issues in India. The government facilitated the monopoly of the Air India and put various limitation for the private airlines. The limited foreign equity and Non Resident Indian investing was another factor. The Kingfisher has remained under a financial crisis since 2012. It shut down its operations after failing to pay the taxes and loans that were due.
Economic Factors
The landing of the Kingfisher airline from the sky to the ground is a result of the turmoil which the Indian economy is facing. The rising fuel costs and strict foreign direct investment restrictions are affecting the sector badly. The changes in the interest rate and the currency value also affected the airline’s revenues and sales. The business cycle also affects the airline industry as during the recession phase, the people consider air travel as a luxury.
Social Factors
With the improving living standard and the disposable income, the people are now willing to pay for travelling worldwide. Kingfisher has high customer value and is famous among the people. It takes due care of its clients from various religions, cultures and castes. It charges premium price which was easily paid by the clients for an amazing flying experience. The environment inside the plane is very friendly which makes the customers more comfortable.
Technological Factors
Kingfisher aircrafts are equipped with latest entertainment facilities as a TV is provided on the back of every seat. It is the only Indian domestic airline offering 16 live channels. The online e booking and check in allows the customers to proceed from their mobiles and laptops. The technology is driving the image of airlines through developing the modern communication, navigation and air traffic management systems. The infrastructure development also helps in reducing the maintenance costs.
Legal Factors
The Indian aviation sector faces various legal restrictions as the state policies, laws and regulations. One reason of Kingfisher airline failure was the requirement of license to fly to the international routes after its venture with the Air Deccan. The tax levies by the central government are now being reduced after understanding the financial difficulties of the airlines. The foreign direct investment regulations are also being revised which will result in more capital inflow.
Environmental Factors
Fuel is the major expense in the airline industry. The revival plan of the Kingfisher airline clearly depicts various environmental friendly solutions. One step is to adopt small sized aircraft which will consume lesser fuel leading to lower carbon emission. Another step will be using one engine instead of two. The fuel efficient aircrafts will reduce the operational costs and reduce the financial burden from the airline. Another environmental challenge for Kingfisher airline is to reduce the noise of the aircrafts. It requires introduction of new technology for producing new jets.