Kingfisher Airdeccan Merger
- 1. Mergers & AcquisitionsMarriage of Presented by,RohitMundhara P-21Mayuresh Bhagwate C-05Bijal Shah C-32Aditi Sabaria C-31Supriya Joshi P-13ParitoshGupte P-10
- 4. Scenario after 1990’sNew Industrial Policy 1991Air Corporation Act 1994Post liberalization period
- 5. Entry Of Private Players
- 7. ConsolidationThe Need Of The Hour
- 9. Origin- Deccan Aviation Ltd.Growing demand of Air connectivityIdentifying potential Consumer baseThe biggest challenge
- 10. Towards making Air travel more ComfortableE-ticketingCut on the Complementary service - food to passengers - no meals or company vehicles - no separate staff - route planning - outsourcing of ground operations - saving operating cost, landing cost & sales tax
- 11. Generation of Additional RevenueSale of food inside the aircraftSelling AdvertisementDifferential ticket pricingNon refundable ticketsNo bulk discountsPaid initial training to staff
- 13. Dr Vijay Mallya identified the gap
- 14. Launched in 2005 by United Breweries Group
- 15. Ready for take off with 4 flights a day and a fleet of one Airbus320
- 16. Ushered a new era of luxury
- 17. Many international and national awardsCarved a niche for itself in a short span of timeOnly airline offering premium 1rst class service on domestic routesModelled on the lines of US carrier Jet BlueTargets Sec A and socio-economic classes
- 18. Great in-flight experience - Personal valet assistance in luggage handling at airport - Personalised in-flight entertainment system - Fashion models as flight attendants - Designer flight interiors -Extendable footrests -3course gourmet cuisine
- 19. Clash of The TitansMARS v/s VENUS
- 20. Motivation for MergerEver Increasing CostCompromise on quality hits the brandUnviable pricingCompetitionIncreasing costsDifficulty in maintaining brand imageCompetition from low-cost airlinesCompetition from International Airlines
- 21. Possible gainsCash crunchLeveraging management and HRRoutes networkLicense to fly internationally
- 22. Possible gainsEconomies of sizeRationalization of PersonnelIncrease in Customer base
- 23. Possible lossesFundamentally opposite modelsImpact on masses - -Fear of rise in fare prices -Ignorance of target audienceLoss of individuality
- 28. UB bought 26% stake at Rs.155 p.s. on 9th July,2007
- 29. Paid Rs.550crores2nd Phase:Open offer for additional 20% stake
- 30. Additional Rs.418croresChanges in Stock Prices
- 31. COST BENEFIT ANALYSISCash Paid = Rs.550Crs + 418Crs = Rs.968CrsPresent Value of 46%stake = 62316254.28*137.5 = 856.85CrsCost for kingfisher = Cash Paid-Present Value = 968-856.85 =Rs.111.15Crs.
- 32. SYNERGIESOperational Synergy in the form of cost cutting(upto Rs.300crs.)Increasing market share(32-34%)Have both direct and indirect connectivity to the US, Europe and different Asian regions
- 33. SYNERGIESReceived in writing slots to operate flights in San Francisco, JFK (New York) and Heathrow (London)These destinations will be connected non-stop from Bangalore, unique routes from India Also applied for Mumbai-Hong Kong, Mumbai-London and Delhi-Kathmandu routes.
- 34. The Aftermath – Post Merger Issues Different Cultures Expected Job Cuts Different Leadership Styles
- 35. contd... Expected Industry impactFurther consolidation
- 36. Rise in fares
- 38. Higher attrition rates in employeesCurrent ScenarioMarket Share
- 39. Kingfisher airlines – Jet airways :- Strategic Alliance
- 40. UB group ready to Divest
- 41. SIPO’s & Rights Issue
- 42. Financial Report Current ScenarioDelays in AirCraftsdeliveries &Cancellation of Orders
- 43. Industry Making Losses-Oil Concerns
- 44. InfrastructureConclusionThe Industry has Witnessed tremendous growth in the Past Decader Leading to intense Competition in the Industry & Setting the Stage for Consolidation
- 45. Webliography – www.flykingfisher.com www.yahoofinance.com www.google.com www.bseindia.com www.businessworld.in