2012
[ INDIGO AIRLINES]
INTRODUCTION IndiGo is a private, low-cost airline based in Gurgaon, Haryana, India. Since commencing operations in August 2006, it has established itself as one of India's leading airlines using its model of efficient, low-cost operations and by attracting customers with low fares. IndiGo has the second largest share in India's domestic air travel market, only behind Jet Airways and as of October 2011 it is the only airline in India making profit. IndiGo has grown faster than any other low cost carrier in South Asia. The airline has also acquired three parking spots in Indira Gandhi International Airport and Chhatrapati Shivaji International Airport. Following Indian regulations, Indigo received its license to operate international flights upon completing five years of operations. Its main operational hub is New Delhi's Indira Gandhi International Airport. Indigo has been awarded numerous airline and travel industry awards. Indigo won the Skytrax Central Asia's best low-cost airline award in 2011. On February 15, 2012, the civil aviation ministry of India has lifted the barriers on the carrier when was set over a year ago to defend the sinking national flag carrier from competition on the International routes.
HISTORY The parent company of IndiGo Airlines is Gurgaon based InterGlobe Enterprises. It commenced its operations from the year 2006. Indigo had placed a firm order of 100 Airbus A320-200 aircraft during June 2005 in plans to commence operations in mid 2006. Indigo took delivery of its first Airbus A320-200 aircraft on 28 July 2006, nearly one year after placing the order, and commenced operations on 4 August 2006 with a service from New Delhi to Imphal via Guwahati. By the end of 2006, the airline had six aircraft. Nine more aircraft were acquired in 2007 taking the total to 15. By the December of 2010, Indigo replaced the state run flag carrier Air India as the top third airline in India.
Corporate culture: Vision The vision of Indigo is to give a hassle free travel experience, on time flights with affordable fares.
Mission The carrier now has bold plans to become one of the country’s top operators in the international market the state run flag carrier Air India as the top third airline in India in 2010.
Values The values of the interglobe group are integrity, customer orientation and future mindedness.
Corporate Structure Aditya Ghosh - President Riyaz Peermohammad – CEO SSanjay Kumar – Chief Commercial Officer Cpt. KPS Nair – Chief of Flight Safety Sanjeev ramdas – President, customer services and Airport Operations
COMPETITORS: 1. Go Air 2. Spicejet 3. jet Airways 4. JetKonnect 5. Jet Lite
PESTLE ANALYSIS A PESTLE analysis is an analysis of the external macro-environment that affects all firms in an industry. P.E.S.T.L.E is an acronym for the Political, Economic, Social, Technological, Legal and Environmental factors of the external macroenvironment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors.
Political Factor Liberalization of the Sector Excise Duty and Sales Tax on Aviation Turbine Fuel Modernization of Airports Interface form Other Agencies
Economic factor Interest rate movement Increasing Oil prices Recession Investments in the Sector
Social factors Developments in Airport Cities Employment Opportunities Ensuring a Level Playing Field Safety Regulation Varied income group Varied age group
Technological factors Growth of Electronic Ticketing Satellite based Navigation Systems
Environmental Carbon offsetting Land issues
Legal Different legalities of different countries
SWOT ANALYSIS Strengths
Strong backing Promoters
Only LCC to make consistent profits
Indigo has high brand awareness and brand equity.
Cost leadership: Successful implementation of low cost strategy.
Highly efficient management that ensures high rate of on- time arrivals.
Continuous innovation to improve on non price factors.
Tie-up with hotels.
Ease of ticket booking for customers.
Scope of product differentiation is less.
Benefits of the innovations implemented by Indigo to provide
Weaknesses
better services to the customers are short-lived, as these can be easily imitated by the competitors.
Indigo is not exploring the untapped domestic air cargo market.
Not on too many routes.
Opening up of International Skies.
Largest Market share among LCCs in Indian Market.
Middle Class taking to the skies.
Plenty of new LCCs to compete with.
Rising Labour costs.
Rising Fuel Costs.
Opportunities
Threats
MARKET SHARE Indigo is one of the top performers in the airline industry on back of good, economical and timely services. IndiGo currently holds 19.6%.
Financial Information IndiGo, owned by InterGlobe Aviation Pvt. Ltd, in its annual filing to the Directorate General of Civil Aviation Stated that its profit rose to Rs. 650 crore from Rs. 551 crore, with this the airline had made a third straight year of profit for the carrier that began operations in 2006. If IndiGo sold its all airbuses A320s which it ordered in 2005, the company can earn about $48 million, based on $3 million a plane in revenue from sales and leaseback premium alone Due to the low costs and increase in passenger traffic IndiGo has seen a 48% increase in revenue in 2011 for IndiGo Airlines. Apart from IndiGo, the other low-fare carrier, SpiceJet was the only one that made a profit during the year 2011, its profit was Rs101.16 crore. Market leader Jet Airways (India) Ltd, including JetLite, were among the ones who made losses. IndiGo’s total revenue rose 48% to Rs3,946 crore on expenses of Rs3,229 crore. The carrier made Rs121 crore in non-operating revenue, potentially from sales and leaseback of aircrafts. The IndiGo charged approximately Rs3,508 average airfare from 9.46 million passengers, based on total passenger revenue of Rs3,518 crore. This has made IndiGo one of the only two airlines which had earned profit in the financial year of 2011.
Core Competence and Competitive Advantage Core Competence The
Business Level Strategies Segment Cost Conscious Passengers Target Group Lower Middle Class / Middle Class Positioning Low Cost No Frills
