Thursday, January 24, 2008

Kingfisher Airlines


Kingfisher Airlines is looking to firm up the options it had on 5 additional A 380s which would then increase its order to 15 aircraft. One of the main reasons for converting the options into confirmed orders is the fact that the cost of the aircraft would work out cheaper than its current selling price since the options are now around two years old.

Analysis :

The only logic one can derive from this massive A 380 order is that KF plans to take advantage of the extra passenger capacity available on board i.e. 500+ seats and offer very cheap fares in Economy class but charge a hefty premium for F & J class to subsidize the low yielding Y class fares.
KF should look into a EU/UK base for its A 380s to fly via enroute to USA similar to the style of 9W's BRU scissors hub as it would be very hard to fill up flights flown nonstop from BOM/DEL to JFK/ORD on a year round basis.

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