Strategy Indigo Report Group 7 (1)

A STUDY OF THE COMEPTITIVE STRATEGY STRATEGY ADOPTED BY INDIGO AIRLINES

Group 7 Section A

Ankit Goyal(M007-15) Nikhil Dalal(M018-15) Prabhat Kerketta(M039-15) Shila !an"on(M0#9-15) !an"on(M0#9-15) Shrini"hi K$"i(M0%8-15) & & ' Satyanarayana (M058-15)

A St$"y  !he *o+etiti,e Stratey A"ote" 'y .n"io Airline/

%

Eecuti!e Su""#r$ O%&ecti!e'

!he obeti,e o thi/ reort i/ to /t$"y the "etaile" " etaile" /t$"y o the o+etiti,e /tratey a"ote" by by .n"iGo airline/ an" al/o to i"entiy 2hat ha/ hele" .n"iGo o$teror+ it/ o+etitor/ riht ro+ it/ inetion Met(o)'

!o $n"er/tan" the i+ortant ator/ re/on/ible or the or+$lation o ororate /tratey4 2e ha,e $tilie" Stratei Manae+ent Mana e+ent tool/ like Porter6/ i,e ore/ +o"el4 &al$e &al$e *hain analy/i/4 anal y/i/4 S! +atri4 P:S! an" the &.; ra+e2ork Li"it#tion'

D$e to oni"entiality la$/e an" ororate oliie/ o the o+any4 ri+ary "ata o$l" not be /o$re"

3

Content' :e$ti,e S$++ary%

.ntro"$tion5 11 !hreat o ne2 :ntrant/11 'arainin o2er o /$lier/11 'arainin o2er o b$yer/11 !hreat o /$b/tit$te/11 *$rrent Day eration/ o .n"io Airline/1% &i/ion1% ;e/o$re/1% erational Peror+ane13 &al$e hain o .n"io15 .nternal :n,iron+ent Analy/i/ an" /o$re/ o o+etiti,e a",antae15 Airrat/15


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.n"iGo4 hea"B$artere" in G$raon4 .n"ia i/ the lare/t airline in ter+/ o a//ener/ lo2n 2ith +arket /hare o 3=5C a/ o Sete+ber %015 .t 2a/ /et $ in early %00= by ;ah$l 'hatia o .nterGlobe :nterri/e/ an" ;ake/h Gan2al4 a ?nite" State/-ba/e" N;. .nterGlobe hol"/ 511%C /take in .n"iGo an" #8C i/ hel" by Gan2al/ o+any *ael$+ .n,e/t+ent/ .n"iGo bean it/ oeration/ on #th A$$/t %00= 2ith a /er,ie ro+ Ne2 Delhi to .+hal ,ia G$2ahati or+er ?S Air2ay/ :e$ti,e ,ie-Pre/i"ent an" Marketin an" Plannin 'r$e A/hby oine" .n"iGo a/ it/ *hie :e$ti,e ier  !he airline alrea"y aB$ire" arkin lot/ or it/ bran" ne2 airrat at both M$+bai an" Delhi airort/ 'y the en" o %00=4 the airline ha" /i airrat Nine +ore airrat 2ere aB$ire" in %007 takin the total to 15 'y Dee+ber %0104 .n"iGo relae" the /tate r$n la arrier Air .n"ia a/ the to thir" airline in .n"ia .t alrea"y ha" a 173C o the +arket /hare4 behin" Kini/her Airline/ an" Eet Air2ay/ Goin+ intern#tion#,

.n Ean$ary %011 .n"iGo reei,e" it/ lien/e to oerate international liht/ $on o+letin i,e year/ o oeration/ .t/ ir/t international /er,ie 2a/ la$nhe" bet2een Ne2 Delhi an" D$bai ,er the net e2 2eek/ it ean"e" to /er,e 'ankok4 Sinaore4 M$/at an" Kath+an"$ ro+ Ne2 Delhi an" M$+bai ith the lit o barrier/ (to rotet the /inkin Air .n"ia) on .nternational ro$te/ in ebr$ary4 %01%4 .n"iGo reei,e" learane to ly to Da++a+ an" Doha R#pi) ep#n'ion

'y early %01%4 .n"iGo ha" taken the "eli,ery o it/ 50 th airrat in le// than = year/ .n"iGo i/ kno2n to ha,e lae" the lare/t or"er in o++erial a,iation hi/tory "$rin %011 A/ o ebr$ary %01%4 .n"iGo 2a/ ean"in rai"ly an" 2a/ +akin /oli" roit/4 the only airline in .n"ia to "o /o .t ha" relae" Kini/her a/ the /eon" lare/t airline in .n"ia in ter+/ o +arket /hare .n"iGo/ /tron a"herene to the lo2 o/t +o"el4 b$yin only one tye o airrat an" keein oerational o/t/ a/ lo2 a/ o//ible alon 2ith hea,y e+ha/i/ on $nt$ality are /ai" to be /o+e o the rea/on/ or it/ /$e// e,en 2hen the airline in"$/try in .n"ia i/ $rrently oin thro$h a ba" ath .n"iGo o$/e/ on a""in a ne2 lane e,ery /i 2eek/ an" /o+eti+e/ e,en a/ter Sri>ankan :nineerin4 a /$b/i"iary o the Sri >ankan la arrier Sri>ankan Airline/ reently 2on the ontrat o eror+in hea,y +aintenane hek/ on %= o the 50


=

Airb$/ A3%0-%00 oerate" by .n"iGo Sri>ankan ha/ been reei,in ontrat/ or the a/t # year/ to eror+ +aintenane hek/ on .n"iGo airrat .n"iGo i/ belie,e" to o$t/o$re it/ airrat to Sri>ankan bea$/e o the $nbearable ta i+o/e" on the loal M; ro,i"er/ +akin the+ $na,orable 2hen o+are" to the M; ro,i"er/ in Sri >anka A%out In)i+o

.n"ia i/ one o the a/te/t ro2in a,iation in"$/trie/ in the 2orl" 'ea$/e o the intro"$tion o liberaliation oliy in the .n"ian a,iation /etor4 the in"$/try ha/ 2itne//e" "ierene 2ith the entry o the ri,ately o2ne" $ll /er,ie airline/ an" lo2 o/t arrier/ .n %00=4 the ri,ate arrier/ ao$nte" or aro$n" 75C /hare o the "o+e/ti a,iation +arket 'e/i"e/4 there 2a/ /iniiant inrea/e in the n$+ber o "o+e/ti air tra,el a//ener/ So+e o the ator/ that ha,e re/$lte" in hiher "e+an" or air tran/ort in .n"ian l$e" the ro2in $rha/in o2er o +i""le la//4 lo2 airare/ oere" by lo2 o/t arrier/ an" the ro2th o the to$ri/+ in"$/try in .n"ia .n a""ition to the liberaliation oliy4 the "ere$lation oliy ha/ al/o laye" a +aor role to eno$rae ri,ate layer/ in the a,iation in"$/try 'elo2 rah /ho2/ the ra"$al ro2th in the "o+e/ti air traiF !he ro2th in the a,iation in"$/try looke" ro+i/in an" hene attrate" +any lo2 o/t arrier/ like Sie Eet4 Go Air an" .n"iGo ater the /$e// o Air Dean in %003 n one han"4 the boo+in oort$nitie/ eno$rae" layer/ to ean" aaity b$t on the other han"4 ri/in $el o/t/ an" taation rate/ inrea/e" the oerational o/t/ !h$/ the lo2o/t layer/ o$n" it "ii$lt to +aintain their o++it+ent .n their $re to /$r,i,e4 they 2ere o+elle" to inrea/e rie/4 a"" ree rere/h+ent/ an" be,erae/ on-boar"4 et So+e layer/ /o$ht re$e in +erer/4 2herea/ /o+e /$r,i,e" by +o"iyin their b$/ine// +o"el o2 *o/t *arrier6 in .n"ia or %008 !he airline $rrently oerate/ =81 liht/ a "ay 2ith a leet o 10% lane/ an" lie/ to #0 "e/tination/ inl$"in 5 international .t ha/ a +arket /hare o 3=5C a/ o Sete+ber %015 'elo2 are the key ator/ o the b$/ine// +o"el o .n"iGo airline/F    

 

A /inle a//ener la// Sinle tye o airlane to re"$e trainin an" /er,ie o/t No rill/ /$h a/ ree oo"H"rink/4 lo$ne/ :+ha/i/ on "iret /ale o tiket thro$h .nternet to a,oi" ee an" o++i//ion/ ai" to tra,el aent/ :+loyee/ 2orkin in +$ltile role/ ?nb$n"lin o anillary hare/ to +ake the hea"line are lo2er


7

.n thi/ reort4 2e 2ill analye 2hat /trateie/ .n"iGo ollo2e" to enter the a,iation in"$/try Al/o4 2e 2ill "i/$// ho2 .n"iGo i+le+ente" the lo2 o/t /tratey to ain o+etiti,e a",antae an" ro,i"e reo++en"ation/ to /$/tain it/ o+etiti,e o/ition in the lon-ter+ !o kno2 abo$t the in"$/try attrati,ene// o a,iation an" the ator/ that hele" .n"iGo enter thi/ +arket4 2e 2ill $/e the Porter6/ i,e ore/ +o"el !hi/ 2ill be $/e$l in ainin in/iht abo$t the entry barrier/4 o2er o b$yer/ an" /$lier/4 o+etition a+on the ei/tin layer/ an" the ea/ible alternati,e/ in a,iation in"$/try S! analy/i/ o the o+any 2ill hel $/ $n"er/tan" the $rrent o/itionin o the o+any ba/e" on the analy/i/ o eternal an" internal en,iron+ent/ or internal analy/i/4 2e 2ill /t$"y the riteria or /$/tainable o+etiti,e a",antae a/ 2ell a/ the &al$e *hain Analy/i/ !hi/ 2ill hel i"entiy the /trenth/ an" 2eakne//e/ o the o+any

A%out t(e Co"p#n$

Parent *o+any

.nterGlobe :nterri/e/

*ateory

.n"ian "o+e/ti /etor

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Airline/

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Go .n"iGo

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n !i+e Peror+ane4 >o2e/t Prie

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Taret Gro$

>o2er Mi""le *la// H Mi""le *la//

Po/itionin

>o2 *o/t No rill/ Go Air Sieet

*o+etitor/ EetKonnet (lo2 o/t bran" o Eet Air2ay/) Air A/ia

In)u'tr$ An#,$'i'


8

A%out t(e In)u'tr$

.n"ia $rrently rank/ 9th in the a,iation +arket in the 2orl" 2ith a /ie o aro$n" ?SI 1= bn >ookin at the $t$re4 .n"ia a,iation in"$/try ro+i/e/ a h$e ro2th otential bea$/e o ro2in +i""le la// o$lation4 rai" eono+i ro2th4 hiher "i/o/able ino+e/4 ri/in a/iration/ o the +i""le la// an" o,erall lo2 enetration le,el/ !he *i,il A,iation in"$/try in i/ ainin ro2th 2hih i/ "ri,en by ator/ /$h a/ lo2 o/t arrier/4 +o"ern airort/4 orein "iret in,e/t+ent/ in "o+e/ti airline/4 $ttin e"e inor+ation tehnoloy inter,ention/ an" ro2in e+ha/i/ on reional onneti,ity !otal a//ener/ arrie" in Sete+ber %015 inrea/e" 13%# er ent year-on-year to 873 +n ro+ 771 +n in Sete+ber %01# .nternational an" "o+e/ti a//ener trai re2 == er ent an" 155 er ent in Sete+ber %015

So+e +aor initiati,e/ $n"ertaken by the o,ern+ent areF •

•

!he Airort/ A$thority o .n"ia (AA.) lan/ to re,i,e an" oerationali/e aro$n" 50 airort/ in .n"ia o,er the net 10 year/ to i+ro,e reional an" re+ote air onneti,ity !he Go,ern+ent o .n"ia4 in it/ "rat i,il a,iation oliy relea/e" or in$t/ ro+ /takehol"er/4 ha/ roo/e" rai/in orein Diret .n,e/t+ent (D.) li+it in "o+e/ti airline/ ro+ the $rrent #9 er ent to o,er 50 er ent4 alon 2ith other reor+/ /$h a/ ta inenti,e/ or airline/4 inenti,e/ or tra,eller/ to ly to /+all to2n/ at aor"able rate/

M#-e In In)i# Gro.t( )ri!er' •

•

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i,e international airort/ (Delhi4 M$+bai4 *ohin4
FDI Po,ic$ orein Diret .n,e/t+ent (D.) o 100 C i/ er+itte" or Greeniel" airort roet/ • $n"er the a$to+ati ro$te ? to 100C D. i/ er+itte" in helioter /er,ie/ an" /ealane/ $n"er the a$to+ati • ro$te ? to 7#C D. er+itte" or ei/tin airort roet/ $n"er the a$to+ati ro$te •


9

In!e't"ent Opportunitie' !he n$+ber o thin/ to be a""e" in the net 5 year/F 300 b$/ine// et/4 300 /+all • airrat an" %50 helioter/ !he "e,elo+ent o ne2 airort/  the AA. ai+/ to brin aro$n" %50 airort/ $n"er • oeration aro// the o$ntry by %0%0 AA. ha/ lan/ to /en" I13 bn ro+ %013-%017 in or"er to "e,elo the airort/ an" or • it/ +o"erniation PEST An#,$'i' Po,itic#, F#ctor' 100 C D. in,e/t+ent/ or Greeniel" roet/ • 100 C ta ee+tion or the airort/ roet/ or a erio" o 10 year/ • Slo2 initiati,e/ taken by the o,ern+ent in the "e,elo+ent • .n"io Airline/ ha/ beneite" the +o/t till "ate • Econo"ic F#ctor' !he ro2in +i""le la// o$lation an" their ino+e/ GDP ro2th in the .n"ian eono+y /lo2e" "o2n 2hih ha/ ore" the airline/ to $t "o2n on their o/t/ /o a/ to a,oi" 2a/tae o aaity *on/tantly l$t$atin oil rie/ "e+an" a reater oerational eiieny ro+ the airline/ Dereiatin ,al$e o r$ee a""/ o/t/ to lea/e rental/4 /alarie/4 an" /ale/ o++i//ion/ 2hen o+are" to the ?S eono+y orkin aital reB$ire+ent i/ hih b$t .n"io i/ ha,in a oo" inanial on"ition o+are" to the o+etition/ Soci#, *#ctor' !he on/tantly hanin ino+e/ or o$lation +ake/ it "ii$lt to reonie the nee"/ o eah ro$ 2hih hane/ aor"in to their /alarie/ !he B$ality an" tye o oo" ha" to be ho/en are$lly a/ "ierent eole ha,e "ierent ta/te/ an" reB$ire /eial inre"ient/ in their kin" o oo" .t beo+e/ "ii$lt to ater to their nee"/ e,ery ti+e ith the ino+e/ o the eole ri/in in !ier% an" !ier 3 itie/ air onneti,ity i/ in "e+an" or the/e itie/ 2ith a oo" le,el reB$eny to a/ +any art/ o the 2or" a/ o//ible A h$e a+o$nt o ri/e in the e+ale/ tra,ellin by airline/ an" hene their /aety a""/ to • o/t No24 tra,ellin by lane/ ha/ beo+e a /tat$/ /y+bol or +any eole Tec(no,o+ic#, *#ctor' Gro2th o eo++ere an" e-tiketin /y/te+ in .n"ia 2ith inrea/e in the internet $/ae

A St$"y  !he *o+etiti,e Stratey A"ote" 'y .n"io Airline/ • •

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10

Mo"erniation an" ri,atiation o the airort/ in the o$ntry !he o,ern+ent ha/ taken initiati,e/ to "e,elo ne2 tehnoloie/ or air trai +anae+ent !he tehnoloial "e,elo+ent ha/ +a"e it o//ible or the a//ener/ to boar" the liht 2itho$t 2a/tin ti+e thro$h re"$e" hek-in ti+e/


11

PORTER FIVE FORCES MODEL T(re#t o* ne. Entr#nt' Ne2 entrant/ ha/ to o thro$h a lot o o,ern+ent re$lation/ an" 2hih i/ not o//ible • or e,eryone to /$ra// !he o/t o enterin i/ ,ery hih bea$/e o h$e tehnoloial an" other oerational • in,e/t+ent/ reB$ire" at initial /tae Dii$lt to +anae ti+ely arri,al/ an" "eart$re/ or /o +any a//ener/ • Saety i//$e/ in,ol,e" 2ith ettin the riht ilot/ an" /e$rin a//ener /aety • !he entry barrier/ i/ ,ery 2ith o+anie/ reB$irin +ini+$+ o 30 rore/ to $/t enter • the in"$/try B#r+#inin+ po.er o* 'upp,ier' Any airline/ in eneral ae a "$ooly o t2o +aor /$lier/ o airrat/ ie Airb$/ an" 'oein .t i/ ,ery "ii$lt to +aintain lo2 o/t/ e/eially 2ith airline/ like .n"io >ak o oo" B$ality ilot/ +ake/ the+ ,ery o2er$l to hoo/e their o+any nly o$r /$lier/ o a,iation $el to airline/ in .n"ia !h$/ oil o+anie/ ha,e a h$e barainin o2er A e2 n$+ber o B$ality /$lier/ kee/ the+ in o++an"in o/ition 2ith re/et to • the airline/ they hoo/e to /$ly the art/ 2ith B#r+#inin+ po.er o* %u$er' '$yer/ in airline/ in"$/try are lare in n$+ber an" hihly ra+ente" th$/ lo2erin their • o2er !he /2ithin o/t/ or the b$yer/ i/ ,ery le// an" hene they ha,e a lot o o2er o • 2ho+ to hoo/e to ly 2ith 'ak2ar" interation 2ith the b$yer/ i/ ,ery "ii$lt •

1%

Current D#$ Oper#tion' o* In)i+o Air,ine' Vi'ion .n"iGo i/ b$ilt or eole 2ith thin/ to "o4 lae/ to be4 eole to /ee - 2ho "ont 2ant to 2a/te ti+e4 +oney or enery in the roe// e ontin$o$/ly o$/ on keein o/t/ lo2 an" a hih reB$eny o liht/ 2hile /tri,in to $lill o$r /i+le bran" +e//ae o ro,i"in @lo2 are/4 on-ti+e liht/ an" a ha//le-ree eeriene to o$r a//ener/ Re'ource'

.n"io4 a/ o 01/t Marh %01=4 ha/ a leet /ie o 10% airrat/ 2ith a,erae ae o airrat bein 3%= year/ .t oerate/ only one tye o airratF Airb$/ A3%0-%00/ 2ith a /tan"ar" /eatin aaity o 180 a//ener/ .t /er,e/ 35 itie/ 2ithin .n"ia an" 5 itie/ internationally ('ankok4 D$bai4 Kath+an"$4 M$/at an" Sinaore) 2ith 719 "aily liht/ Market /hare L .n"io o$ie" 38C o the +arket /hare in the "o+e/ti a,iation /etor in %01#-15 !here ha/ been a +arinal 100 b/ inrea/e in +arket /hare in <1 %015-1= to 39C !hi/ inrea/e in +arket /hare ha/ been re/$lte" "$e to aaity a""ition an" ro$te ean/ion o,er a erio" o ti+e L .nternational +arket /hare ha/ on/i"erably "eline" to 5C in %01#-15 ro+ 7C in %0131# .t re+aine" /table in <1 %015-1= 2ith re/et to %01#-15 Share in the "o+e/ti +arket an" international +arket (ba/e" on ;PKM- ;e,en$e Pa//ener K+)


13

Note: Indigo started its international operations from September 2011. International market share represents share of international traffic carried by Indian airliners, originating from and terminating in India. It has been calculated b ased on international pax km performed by Indigo di!ided by international pax km performed by all Indian airliners. Source: Indigo "#$

Se+ental +arket /hare by a//ener trai or to 10 ro$te/ in eah /e+ent

Note: %op 10 routes by traffic for the abo!e three categories are calculated on the basis of t&o &ay, nonstop, origindestination traffic for '(201)* +ir India includes +lliance +ir and +ir India xpress, -et +ir&ays includes -etite, /thers include +ir osta, +ir+sia India and istara. Source: Indigo "#$ Oper#tion#, Per*or"#nce

.n"io6/ "o+e/ti a//ener trai (2hih or+ a +aor ortion o o,erall a//ener trai) re2 by 31C y-o-y to %37 +n in %01#-15 !he P> (Pa//ener >oa" ator) inrea/e" by 310 b/ to 79#C a/ ;PKM (;e,en$e Pa//ener K+) ro2th o$tae" aaity (ASKM-A,ailable Seat K+) ro2th - %7C inrea/e in ;PKM/ an" %%C ro2th in ASKM/  +arinally inrea/e" by 1#0 b/ to 8%#C in %01#-15 .n <1 %015-1=4 "o+e/ti a//ener trai re2 #0C y-o-y P> inrea/e" /harly by =80 b/ to 83C a/ ;PKM re2 by 35C 2hile ASKM ro/e by %#C "$rin the /a+e erio" .nternational a//ener trai re2 by 15C in <1 1= ro+ <1 15 .n the /a+e erio"4 P>/ ho2e,er "eline" by %00 b/ to 83C


1#


15

Oper#tion#, 'n#p'(ot

Source: irectorate 3eneral i!il +!iation, "ISI "esearch Ser!ice'/ 'ein a lo2-o/t arrier4 none o .n"iGo/ liht/ ha,e b$/ine// la// or ir/t

la// /etion/ .t oer/ only eono+y la// /eatin !o kee are/ lo24 .n"iGo "oe/ not ro,i"e o+li+entary +eal/ in any o it/ liht/4 tho$h it "oe/ ha,e a b$y-on boar" in-liht +eal rora+ No in-liht entertain+ent i/ a,ailable4 b$t the airline ro,i"e/ an in-liht atalo$e

1=

V#,ue c(#in o* In)i+o

'igure: alue chain of Indigo Intern#, En!iron"ent An#,$'i' #n) 'ource' o* co"petiti!e #)!#nt#+e

!he key on/tit$ent/ o .nternal :n,iron+ent are ;e/o$re/4 *aabilitie/ an" *ore *o+etenie/ !he re/o$re/ +ay be either tanible or intanible *o+etiti,e a",antae o a o+any "e/ribe/ the attrib$te/ that allo2 it to o$teror+ it/ o+etitor/ e 2ill try to analye ho2 .n"io i/ tryin to le,erae it/ re/o$re/ eiiently to ain o+etiti,e a",antae !he ollo2in are the !anible re/o$re/ o .n"io Aircr#*t' F

.n"io4 a/ o 01/t Marh %01=4 ha/ a leet /ie o 10% airrat/ 2ith a,erae ae o airrat bein 3%= ear/ .t oerate/ only one tye o airratF Airb$/ A3%0-%00/ 2ith a /tan"ar" /eatin aaity o 180 Pa//ener/ .t /er,e/ 35 itie/ 2ithin .n"ia an" 5 itie/ internationally ('ankok4 D$bai4 Kath+an"$4 M$/at an" Sinaore) 2ith 719 "aily liht/ .n"io6/ entire leet on/i/t/ o A3%0-%1# airrat itte" 2ith &%500-A5 tye enine/ leibility in /he"$lin4 trainin o/t/ ,irt$ally nil ("$e to the /a+e tye o airrat $/e" in the leet o .n"iGo !hi/ +ake/ the "ri,er/ eetionally eiient at ilotin their airrat A,erae airrat ae ha/ allen to 3%= "$e to inl$/ion o ne2 airrat/) A yo$ner leet +ean/ le// +aintenane o/t/ ne the airrat bein to /ho2 /in/ o 2ear an" tear4 they are ro+tly taken o /er,ie 2hih $/$ally o$r/ at the en" o 5 year/ an" the roe// to /en" the+ bak ho+e bein/4 keein +aintenane o/t/ /iniiantly lo2 .n"io lan/ to +aintain a lo2er leet


17

ae a/ all it/ airrat by lea/in or a erio" o 5-= year/ !hi/ 2ay they a,oi" the D-*hek 2hih i/ "one ater 8 year/ o oeration o an airlane (A D-hek +ay take $ to % +onth/ "$rin 2hih the airrat re+ain/ o$t o /er,ie) 0 Hu"#n Re'ource'

1 !he h$+an re/o$re/ or in"io on/i/t o the ilot/4 abin re2 +e+ber/ an" ro$n" /ta % No airline an rer$it a trainee ilot an" "iretly a//in hi+ to ly an airlane arryin aro$n" 500 a//ener/ !he labor-ore ha/ to be traine" an" then a//ine" 2ith ta/k/ to eror+ ater roer e,al$ation !he ay /tr$t$re o the e+loyee/ at .n"iGo i/ a/ ollo2/F :eriene" o++an"er/ :eriene" ir/t oier/ Ne2 Pilot/ *abin re2 :nineerin

3-# la/ + %-%5 la/ + 1 la + 35-50k + 75-80k +

'e/i"e/ the ilot/ are re2ar"e" or on ti+e arri,al/ an" $el /a,in/ Fue,

Airrat !$rbine $el i/ the o+le+entary ro"$t or airlane an" it on/tit$te/ aroi+ately #5C o the ro"$tion o/t/ Do+e/ti $el tae/ an be a/ hih a/ 30 er ent alon 2ith an 8% er ent ei/e "$ty A/ a re/$lt4 $el or .n"ian airline/ ao$nt/ or abo$t #5 er ent o total oeratin o/t/4 o+are" to the lobal a,erae o 30 er ent .n"io/ airrat try to /a,e $el by $/in /ot2are to oti+ie liht lannin or +ini+$+ $el b$rnin ro$te/ an" altit$"e/ an" al/o by +akin $/e o late/t $el /a,in tehnoloy .n"io 2a/ one o the ir/t airline/ to lae or"er or the Airb$/ A3%0neo a+ily 2hih lai+/ to "eli,er 15C le// $el on/$+tion an" 8C lo2er oeratin o/t/ .n"iGo 2a/ al/o a+on the ir/t airline/ to ha,e the airrat tai to the ter+inal 2ith one enine4 /h$ttin "o2n the /eon" enine to /a,e $el .n"iGo ha/ interate" $el /a,in ratie/ in it/ "aily roe//e/ !heir Stan"ar" eratin Proe"$re "e+an"/ liht/ to ly 2ith +ini+$+ reB$ire" $el .n a""ition4 hol"in $el an" ontineny $el are ket on bare +ini+$+/ to a,oi" the etra loa" an" o/t/


18

Int#n+i%,e re'ource'

L Br#n) E1uit$2Reput#tion .n"iGo i/ the +o/t re$te" lo2 o/t arrier "$e to the ollo2in rea/on/F 1 n ti+e arri,al/ i/ the key "ierentiatin ator or .n"iGo 2hih /et/ it aart ro+ it/ o+etitor/ % .n"iGo kee/ i+le+entin ne2 an" inno,ati,e i"ea/ to inrea/e the B$ality o $/to+er /er,ie ne oo" ea+le i/ the ro,in @hek-in o$nter/ .n"io $/e/ to hel a//ener/ 2ith only abin baae to hek-in 2ith an .n"iGo oiial 2ith a han"hel" "e,ie4 rather than linin $ at the hek-in o$nter !hi/ i+ro,e/ $/to+er eeriene 3 .t i,e/ the $/to+er/ the ree"o+ to arry their o2n eatable/ an" /nak/ on boar" # *o+are" to the "iret o+etitor/4 that i/4 the other lo2 o/t arrier/ like SieEet4 Eetlite4 et .n"iGo oer/ the lo2e/t airare L Soci#, C#pit#,/ 1 .n"iGo ha/ a+iable relation/hi 2ith the other oraniation/ that ontrib$te to the ,al$e a""ition or the /er,ie ro,i"e" to the $/to+er/ % .n"iGo ha/ enae" +any !ra,el 2eb-ortal/ an" reional tra,el aent/ 2ith inenti,e/ like bookin o++i//ion/4 et !here ha,e been no in/tane/ o "i/tre// bet2een .n"iGo an" it/ other ollaborator/4 that i/4 /$lier/ 3 *ollaboration 2ith hotel/F M$+bai-ba/e" hotel hain oerator Saro,ar o2 *o/t *arrier in .n"ia !he ollo2in oint/ ontrib$te to the bran" a2arene// o .n"iGoF 1 A",erti/in $/in rint +e"ia like ne2/aer/4 billboar"/4 et % .t +ay not ay or an a",erti/e+ent in a ne2/aer4 b$t ha/ been o,ere" in ne2/ or it/ lo2 o/t /tratey i+le+entation


19

3 A/ .n"iGo ro,i"e/ better ,al$e a""e" /er,ie/ to the $/to+er/4 or" o Mo$th4 ro+otion al/o 2ork/ in it/ a,or L E"p,o$ee Re,#tion'(ip/ Goo" :+loyee ;elation/hi i/ a key ator to /$/tain o+etiti,e a",antae .n"iGo ro,i"e/ /e,eral inenti,e/ to it/ e+loyee/ .n"iGo ha/ been /eein a healthy ro2th in a//ener n$+ber/ an" it i/ oti+i/ti abo$t it/ lon ter+ ro2th Al/o4 it i/ lannin to ean" it/ e+loyee /trenth an" at the /a+e ti+e there i/ no in"iation o "o2n/iin the $rrent /ta At a ti+e 2hen /e,eral "o+e/ti airline/ are lookin to r$ne their /ta /trenth4 the Delhi-ba/e" lo2 o/t airline4 .n"iGo4 ha/ been on the looko$t or +ore ilot/4 abin atten"ant/4 $/to+er /er,ie an" airort /er,ie aent/ !he abo,e at/ /ho2 that .n"iGo ha/ taken a o/iti,e aroah 2hile "ealin 2ith it/ loyal e+loyee/ at the ti+e o eono+i /lo2"o2n Source' o* Co"petiti!e #)!#nt#+e Lo. *#re *,i+(t'

.n"io 2on or the 3r" on/e$ti,e ti+e at SK!;A orl" Airline A2ar"/ %01% or bein the be/t lo2 o/t airline o .n"ia O *entral A/ia

Co't e**icienc$ .n"io ha/ been oerin lo2 are liht/ an" i/ /till able to ha,e oo" a/h lo2/ !hi/ i/ "$e to the o/t eiieny aability !hey ha,e +anae" to re"$e the o/t/

!hi/ an be attrib$te" to ,ario$/ /trateie/ a"ote"F • •

• • • •

• •

No rill/ an" Sinle +o"el o airrat .n"iGo ha/ /t$k 2ith it/ oliy o oerin one la// o no-rill/ /er,ie on a /inle tye o lane .n"io ha/ ho/en to /tik to the 2orl"/ be/t-/ellin /inle-ai/le airrat4 the Airb$/ A3%0 eratin on /eon"ary airort/ :-tiketinF to a,oi" ee an" o++i//ion ai" to tra,el aent/ e2er e+loyee/ er airrat an" +ore /eat/ er airrat .n"iGo airline e+loy/ ar e2er eole than an y other airline/ 2ith one o the in"$/try/ leane/t 2ork ore/ <$b an" /oke +o"el or liht/ ;e"$tion on $el b$rnin "$e to A-3%0 airrat/

erationally it 2o$l" be i+o//ible to +ake a roit at the ,ery lo2 are/ they 2ere oerin thro$h the ir/t o$r year/ o oeration/4 2here tiket rie/ on .n"io 2ere ro$hly #0 erent o o/t o oeration


%0

:,en beore /tartin oeration/ in %00=4 .n"io ha" lae" a ir+ or"er or 100 Airb$/ A3%0 airrat in E$ne %0054 2hih a,e it a riin a",antae !he airline then aB$ire" arkin lot/ in Delhi an" M$+bai4 an" by the ti+e the ir/t .n"io liht 2a/ anno$ne"4 it ha" alrea"y /he"$le" the ir/t %0 airrat Al/o it o$/e" on inorani ean/ion by a""in a lane e,ery /i 2eek/ On3ti"e *,i+(t' Pa//ener/ all aro// .n"ia ra,e abo$t .n"io6/ on-ti+e eror+ane4 the hihe/t a+on/t all airline/ at 9%#C !hey are al2ay/ on ti+e an" oten beore ti+e4 2hih i/ re+arkable !he +o+ent the liht lan"/ an a$to+ati +e//ae i/ triere" ro+ airrat to ontrol en ter
Lo. turn#roun) ti"e !$rnaro$n" ti+e i/ the ti+e taken or a lane to be rea"y or the net liht bet2een lan"in an" takeo .n"iGo boa/t/ o a t$rnaro$n" ti+e o le// than 30 +in$te/ >e// ti+e on the ro$n" +ean/ +ore ti+e in the air 2hih al/o re"$e/ $el b$rnin .n"iGo/ airrat /en" +ore than 11 ho$r/ a "ay in the /ky4 o+are" to the in"$/try a,erae o eiht or 10 ho$r/

U'in+ tec(no,o+$ '"#rt,$ ?nlike +an$al /y/te+/ $/e" by other airline/4 .n"iGo lane/ are eB$ie" 2ith a "iital link /y/te+ or tran/+i//ion o /hort4 /i+le +e//ae/ bet2een airrat an" ro$n" /tation/ ,ia ra"io or /atellite alle" Airrat *o++$niation/ A""re//in an" ;eortin Sy/te+ (A*A;S) 'eore e,ery .n"iGo liht "eart/ an a$to+ati +e//ae i/ triere" ro+ the airrat to it/ oeration/ ontrol *entre - an" i++e"iately the /a+e "eart$re ti+e et/ reor"e" in the /ot2are Si+ilarly4 the +o+ent the liht lan"/ an a$to+ati +e//ae i/ triere" ro+ airrat to ontrol enter
.n"iGo ha/ eat$re/ /$h a/ B$e$e b$/ter/ at +o/t airort/4 2here i yo$ are arryin only abin l$ae4 yo$ nee" not /tan" in a hek-in B$e$e an" the/e B$e$e b$/ter/ 2o$l" rint boar"in ar"/ ro+ han"-hel" +ahine/ B$ikly


%1

Route'/

.n"io oerate/ o,er a le//er n$+ber o "e/tination/ than it/ o+etitor/ b$t 2ith a hiher reB$eny not o+arin Eet/ leet /ie a/ it oerate/ +ore than "o$ble liht/ er "ay o+are" to .n"io

!he net2ork +a/ /ho2 that all .n"io/ "e/tination/ are onnete" to at lea/t t2o itie/ 2hile +o/t are onnete" to 3 or +ore "e/tination/4 2herea/ thi/ i/ not the a/e 2ith Eet Air2ay/ !hi/ +ean/ .n"io an kee it/ airrat in the air or a loner erio" o ti+e an" /a,e $ on airort hare/ 'ea$/e o thi/ .n"io ha/ a hih airrat $tiliation rate o +ore than 115 ho$r/ er "ay er lane !hi/ al/o +ean/ that $/to+er/ "ont ha,e to look or onnetin liht/ 2ith other o+etin oerator/ Sie Eet "e/tination/ al/o /ee+ to be 2ell onnete"4 b$t they ha,e a larer re/ene in !ier % an" !ier 3 itie/ (e/eially in the /o$th) an" trai to an" ro+ the/e itie/ ten"/ to be /ea/onal


%%

VRIO Fr#"e.or-

&;. i/ the arony+ ro+ the ir/t letter/ o the "i+en/ion/ - ,al$e4 rarene//4 i+itability4 an" oraniation So4 the ir/t B$e/tion that ha/ to be an/2ere" i/ 2hether a re/o$re i/ ,al$able .t i/ on/i"ere" ,al$able i it an inrea/e +arket /hare4 ahie,e o/t a",antae/4 or both ther2i/e4 it i/ not a /o$re o o+etiti,e a",antae ne a re/o$re i/ "ee+e" ,al$able4 the net B$e/tion i/ 2hether it i/ rare or that it i/ not a,ailable to all o+etitor/ . it i/ ,al$able b$t not rare4 +eanin o+etitor/ o//e// the /a+e re/o$re/4 the oraniation ha/ no inherent a",antae in thi/ re/o$re !he re/o$re +$/t al/o be "ii$lt or o/tly or o+etitor/ to i+itate or aB$ire !hi/ "i+en/ion i/ alle" i+itability4 2hih an re/$lt in a /$/taine" o+etiti,e a",antae only i the oraniation an take a",antae o it raniation i/ 2here the re/o$re i/ /$orte" by any ro,i/ion/ in the o+any an" that it an be $/e" roerly ther2i/e4 the re/o$re or aability i/ o little $/e !h$/4 a re/o$re that i/ ,al$able4 rare4 o/tly to i+itate4 an" the o+any i/ oranie" to at$re it/ ,al$e an be a /o$re o /$/tainable o+etiti,e a",antae or an oraniation Re'ource' 4 Co"petencie'

V#,ue

R#rit$

I"it#%i,it$

Or+#ni5#tion

Lo. F#re'

e/

e/

No

e/

Sin+,e t$pe o* Aircr#*t

e/

e/

e/

e/

Turn#roun) Ti"e

e/

No

e/

e/

Br#n) N#"e

e/

e/

e/

e/

V#,ue .n"iGo i/ oerin the lo2e/t are/ to it/ $/to+er/ !he 2ay they "o it i/ thro$h ha,in a /inle tye o Airrat 2hih re"$e the o,erall +aintenane o/t o the Airrat4 /ine there i/ only one kin" o Airrat .t al/o "oe/ $el

%3

R#rit$ .n"iGo ha/ the hihe/t +arket /hare in the Airline in"$/try an" it o2e/ e,erythin to the lo2 are tiket/ it oer/ to the $/to+er/ !he lo2 a,erae leet ae4 /inle tye o airrat an" the oliy o on ti+e e,ery ti+e i/ a rarity in the .n"ian Airline .n"$/try

I"it#%i,it$ :,en tho$h .n"iGo ha/ reate +$h ,al$e in the +arket an" a+on/t it/ $/to+er/4 b$t +any o it/ /trateie/ like le// t$rnaro$n" ti+e an" $/in /inle tye o Airrat are i+itable an" hene4 in lon r$n are not /$/tainable

Or+#ni5#tion .n the la/t e2 year/4 .n"iGo ha/ beo+e the bran" na+e in the .n"ian Airline .n"$/try .t ha/ har"ly been ten year/ /ine it/ inetion an" it ha/ reate" a bran" ,al$e thro$h $niB$e ,al$e roo/ition

T(e Co"petiti!e A)!#nt#+e .n"iGo ha/ i+le+ente" lo2 o/t /tratey to ain o+etiti,e a",antae in the .n"ian A,iation .n"$/try .t ha/ been able to ahie,e it/ break e,en 2ithin t2o year/ o it/ la$nh De/ite bein a ne2 entrant4 it +anae" to beo+e a o/t lea"er in it/ /etor .n"iGo tea+ $/e/ all o the/e re/o$re/ to "e/in roe//e/ an" r$le/ that are /ae an" /i+le4 that +ake /en/e4 an" that $t 2a/te an" ha//le/4 2hih in t$rn en/$re/ a $niB$ely /+ooth4 /ea+le//4 rei/e4 i++ik-ree $/to+er eeriene at are/ that are al2ay/ aor"able


%#

!he/e ator/ oint to2ar"/ a /liht blen" o "ierentiation o+etiti,e a",antae bein /o$ht by the airline 2ithin the broa" o+etiti,e a",antae o bein a o/t lea"er

S6OT An#,$'i' *or In)i+o Stren+t(' L .n"iGo ha/ hih bran" a2arene// an" bran" eB$ity L *o/t lea"er/hiF S$e//$l i+le+entation o lo2 o/t /tratey L
6e#-ne''e' 1 Soe o ro"$t "ierentiation i/ le// % 'eneit/ o the inno,ation/ i+le+ente" by .n"iGo to ro,i"e better /er,ie/ to the *$/to+er/ are /hort-li,e"4 a/ the/e an be ea/ily i+itate" by the o+etitor/ 3 .n"iGo i/ not re/ent in "o+e/ti air aro +arket # Not re/ent in .nternational +arket

T(re#t' 1 ;i/in A! rie/ % .nrea/in o+etition 3 :ono+i /lo2"o2n # Poahin 5 Go,ern+ent intererene = Sarity o traine" ilot


%5

Future 'tr#te+$ *or In)i+o #ir,ine'

.n"iGo Airline/ ha/ been hanin the a+e or all other "o+e/ti airline/ oeratin in .n"ia 2ith the ne2 or"er/ o %50 Airb$/ 3%0 Neo/ in %015 !hi/ +ea or"er not $/t only /ho2/ it/ ir+ oni"ene in it/ .n"ian ro2th /tory b$t al/o in it/ ability to kee it/el ahea" o the other arrier/ !hey are lea/t bothere" abo$t it/ lo2 o/t o+letion or bein the leay arrier/ .n"io i/ /i+ly ollo2in the /te/ o the bi layer/ o a,iation in"$/trie/ like :tiha" Air2ay/ an" it/ G$l o$/in/ - airline/ 2hih are takin the o+letion 2ithin the in"$/try to the "oor/te o o2er$l A+erian an" :$roean arrier/ by eten/i,e leet are//i,e 2o2in o lobal tra,eler .t an be /een that rai" leet ean/ion i/ the +ain ke y to thi/ are//ion an" bo+bar"in the .n"ian +arket 2ith the aaity i/ a a+e .n"iGo ha/ a"ote" a lon ao .t alrea"y ao$nt/ #0 erent o "o+e/ti +arket in ter+/ o a//ener an" a +arket lea"er by a 2ell an" o+ortable +arin 2ith it/ leet/ o 97 oerational airrat/ '$t the +o/t intere/tin at i/ that it ahie,e" the eat 2ith $/t one-o$rth o it/ total airrat an" ha/ ornere" o$t +ore than a thir" o all "o+e/ti a//ener/ >et $/ no2 on/i"er the ,ital oint/ that at$ally hele" .n"iGo in bein the +arket lea"er an" 2ill hel it +aintainin it/ o/itionF L .n"iGo ha/ an a,erae leet ae o o$r year/ an" it i/ +akin /$re that it ontin$e/ at lea/t till %03% .t 2a/ a relanne" /tratey that 2a/ +a"e abo$t 10 year/ bak .t ha" lae" a b$lk or"er o 530 airrat/ 2hih it 2ill be reei,in in %0%= !hi/ inl$"e/ 100 Airb$/ A-3%0 in %0054 180 A-3%0 Neo/ in %011 an" %50 A-3%0 Neo/ in %015 .t an be notie" that the b$lk or"er/ hele" neotiatin at lo2er rate/ A /tratey or o/t $ttin L *$rrently at eak4 .n"iGo ha/ 330 lane/4 b$t one all the lane/ are "eli,ere" it 2ill be ha,in a leet o 530 lane/ an" thi/ i/ "$e to the b$y4 /ell an" lea/e bak6 /tratey !he ol"er lane/ 2ill be /ol" to le//or/ at +arket rie an" the lane/ are aain lea/e" bak or the net = year/4 2hih +ean/ or the ir/t /i year/ .n"iGo reei,e/ a lane e,ery +onth L :,ery +onth a lane oe/ o$t o the .n"iGo6/ leet a ne2 lane/ oin/4 re"$in the a,erae leet ae 2hih al/o re"$e/ the a,erae o/t o +aintenane !he Neo/ hel .n"iGo in /a,in 10-15C o o,erall $el o/t an" a/ 2e kno2 that that he $el o/t/ +ore than 50C o the arrier/ o/t L D$e to the /i year/ lea/e bak lan4 one-thir" o .n"iGo6/ leet 2o$l" be Neo/ 2ithin the net t2o-an"-hal year/ !hi/ 2ill ha,e a /tron o/iti,e i+at o abo$t 7C on the o+any6/ botto+ line A/ the .n"oGo oiial/ /ay4 other airline/ an oy their oo"4 a",erti/in an" other thin/ b$t they annot reliate the leet .n"iGo ha/ L Alon 2ith it/ $rrent or"er o lane/4 .n"iGo i/ lannin to inrea/e it/ re/ene in the n$+ber o itie/ it lie/ to4 inrea/in the n$+ber by t2o or three e,ery year .t ha/ lanne" to be e/tabli/he" in 5= itie/ o+are" to 33 no2 .t neither "oe/ ha,e any lan/ on reional lyin nor b$yin /+aller lane/ An" nobo"y $rrently ha/ been able to i+le+ent a t2o +o"el /tratey e an /ee that /$h /tratey 2hih +ainly o$/e/ on the $t$re lannin an" ro2th i/ really helin .n"iGo et an etra e"e o,er it/ o+etitor/


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Re*erence' httFHH222in"ia-a,iationinHae/H,ie2H38Hano,er,ie2ht+l

httFHH222ibeorHin"$/tryHin"ian-a,iationa/

httFHH222+akeinin"iao+H/etorHa,iation

htt/FHH222B$orao+HAirline/-in-.n"iaH

Strategy Indigo Report Group 7 (1)

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