Abstract

The case is based on the crisis faced by Kingfisher Airlines during November 2011. It describes the paradoxical situation faced by the airline industry in India which experienced exponential growth in passenger volumes; but with the exception of IndiGo Airlines, all the airlines failed to make profits. However, in general, the low-cost airlines did better than the full service airlines. Other than the government-owned Air India, Kingfisher Airlines, a full service airline, was in the worst possible shape and close to bankruptcy during that period. Lack of cash forced the airline to cancel about 35 flights in a day in November 2011, disappointing customers, the only stakeholder group that was happy with the airline. This event brought the whole industry under public scrutiny. Using the stakeholder perspective, the case suggests that owing to an excessive focus on one stakeholder group, the customers; and the neglect of the other four stakeholder groups, namely, suppliers, employees, community and society, including government agencies, and also the owners or shareholders; the organization had nearly gone bankrupt. The top management has to chalk out a strategy that reengages with all the stakeholders to get them to support it during Kingfisher’s struggle for survival and to put the airline on a track of recovery.

Learning Objective

The objective of the case is to emphasize the need to satisfy five sets of stakeholders (i) customers, (ii) employees, (iii) suppliers, (iv) community/society, including government agencies, and (v) owners to build and maintain a resilient organization that can do well across good and bad times. This case highlights the need to balance the expectations and interests of the five stakeholder groups that are critical to the organization in order to keep them engaged. Disengagement by any one of the stakeholders can potentially lead to the death of an organization.