INTRODUCTION

Indigo airline is a low cost airlines company operating from India since 2006. It has been
very successful in the low cost airlines business from the time they have begun
operations. They are one of the market leaders in the low cost airlines service providers
and have a very good reputation in the Indian market. The reason for their good
reputation is because of their punctuality and the service that they provide. Indigo
airlines are currently catering to the needs of the domestic travellers in India and have
been flying the sky since 2006. It has gained advantage in the market due to the
punctuality and the prices that they offer to the customers.

OBJECTIVES/MISSIONS
Indigo airlines aims to become the number one leader in the low cost airline industry of
India, offering the best service and ensuring highest standards of quality at low cost to
the customer.
low fares, on-time flights and a hassle-free experience

1. OPERATIONS:

Single aircraft type

We employ a single type of airframe and engine within our current fleet, which we believe
reduces our expenses related to maintenance, spare parts, operation, crew training and labor,
as well as helping us to more efficiently manage crew rosters.

SINGLE CLASS

Having only Economy class means that Indigo does not have to spend time,
money and crew on privilege passengers. They also don't need to maintain
expensive lounges at airports further reducing costs.
Maruti Suzuki does not sell luxury sedan's.
But they still are the leading car manufacturers in India.
Indigo's target audience are the railway passengers.
Passengers had settled for the shabby, crowded, unreliable Indian Railways due
to lack of options.
Indigo has managed to woo these ill treated passengers with some exceptional On
time performance and a good dose of customer service.

See you don't need an all rounder always, a good specialist can some times do the
job for you.

Young, modern and fuel-efficient fleet

As of December 31, 2014, the average age of our aircraft was 3.1 years, which, according to
CAPA, was the second youngest average fleet age among Indian carriers and one of the
youngest fleets of any LCC globally. We maintain our young fleet by predominantly entering
into short-term sale and leaseback operating leases for the aircraft we have ordered from
Airbus, typically ranging from three to six years. We actively seek to maintain a young fleet
because we believe it leads to better reliability in terms of aircraft performance, lower
maintenance costs, improved fuel-efficiency, higher flight dispatch reliability and higher
passenger appeal. The A320 aircraft delivered to us by Airbus since January 2013 have been
equipped with wing-tip sharklets which consume less fuel than aircraft without sharklets,
according to Airbus. In 2008, we upgraded to IAE SelectOne engines, which we believe
consume less fuel than our previous engines. In March 2011, we began to use the Pratt &
Whitney EcoPower Engine Wash process for our engines, which we believe results in
incremental fuel savings. As a result of these and other measures, we have been able to
reduce our fuel consumption per block hour by 3.0% from fiscal 2010 to fiscal 2015.
According to Airbus, the new A320neo aircraft are expected to consume up to 15% less fuel
than current generation A320 aircraft without sharklets, which will further reduce our fuel
consumption per block hour as these aircraft enter our fleet from 2015 onwards.

Indigo has an average fleet age of less than 3 years. A younger fleet means less
maintenance costs. Indigo plans to maintain a lower fleet age as all its aircraft are
leased for a period of 5-6 years. This way they avoid the D-Checkwhich is done
after 8 years of operation of an airplane. (A D-check may take up to 2 months
during which the aircraft remains out of service.)
FUEL COSTS
The biggest cost for any airline is jet fuel; it can add up to 50 per cent of the
operational cost and any savings here could make a large difference to
operations. IndiGo goes through it with a toothcomb. For instance, when the
aircraft lands and comes to a standstill, the airline goes into a detailed analysis of
whether it should be on auxiliary power or should it invest in a ground power unit
to save fuel costs. "The question is whether you want to burn jet fuel for the
auxiliary unit or burn diesel in the ground unit which is cheaper," says an aviation
insider. Pilots are put through training on how to save fuel, which includes details
of the time they should take to climb to 32,000 feet. "You can thrust the engine
and reach the height fast which means high fuel consumption, or you could do it
gradually which saves fuel. That is the detailing the airline goes through," points
out a source which has closely seen the airline working. Insiders say that the
airline preferred not to go for a full-fledged inflight magazine, which would have
added additional weight and burnt more fuel, and stuck to a catalogue-size

magazine which is lighter.

Its consistent record of profitability has also helped the airline in getting more
attractive financing deals to pay for its lease rentals which, according to
estimates, are around 20 per cent of the total operating cost. It's an advantage
which its competitors who are in the red cannot match. "We have been able to
secure the financing for our planes in advance. The single largest factor which
drives it is the creditworthiness of the airline because of the five years of profit,"
says Ghosh.

High aircraft utilization

Our aircraft utilization in block hours was 11.4 hours per day per aircraft in fiscal 2014,
which was among the highest of any airline in India, according to CAPA. We maintain high
aircraft utilization rates by keeping a low turnaround time between our flights. Additionally,
we operate a point-to-point route network with no interlining or code-sharing with other
airlines for passenger traffic, which further helps to reduce turnaround time.
No-frills product
We have strived to achieve significant cost reductions by scrutinizing every aspect of our
business to remove non-essential costs without compromising passenger safety, security or
on-time performance. We offer a single class of economy service, which allow our A320
aircraft to have the maximum seating capacity of 180 seats. Unlike most full-service carriers,
we do not offer a frequent flyer program, free lounges or include food and beverages in our
ticket price for non-corporate passengers. These items have helped to further reduce our cost
base.
Low distribution costs

We seek to reduce our distribution costs by increasing direct sales via our website, airport,
call center and mobile app and scaling down commissions paid to online and traditional travel
agents. Approximately 20.9% of our ticket sales were made through these direct channels in
fiscal 2015. We adjusted the commissions paid to online travel agents in January 2015.
structural cost advantage which we expect to maintain.
I.

Largest Airbus aircraft orders in history enabling favorable terms on aircraft, engines
and components.Our firm orders of 100 A320 aircraft in June 2005 and 180 A320neo
aircraft in June 2011 were each the largest single order of aircraft from Airbus at the
time of the order, according to Airbus. We were one of the first airlines globally to
order the A320neo aircraft, according to Airbus. Based on current announced
production rates, Airbus has just over 8.5 years of current backlog for the A320 family

of aircraft, according to Airbus. We believe that the magnitude of our 2005 and 2011
aircraft orders helped us to negotiate favorable terms with Airbus and our other
aircraft-related suppliers and service providers, which provides us with a structural
cost advantage by reducing the overall costs associated with the acquisition,
maintenance and operation of our aircraft. We receive non-refundable incentives from
manufacturers upon the delivery of aircraft and engines and upon the achievement of
certain milestones. The application of these purchase incentives to our operating
leases results in a net reduction in our aircraft rental payments which is amortized
over the initial terms of the operating leases.

II. Marketing:
1.
2.

Little advertising spend.

High reliance on word of mouth marketing in its early days by
establishing a reputation of being a no frills airline which is always clean
and on time.
3.
Strategic marketing - Indigo advertised heavily when it started
international operations and also when Kingfisher was going bust, with
catchphrases like 'Let the bad times roll Fly IndiGo in good times and
in bad times.' taking a dig at Kingfisher's tagline 'Fly the good times.'
This move was criticized but it worked for Indigo.
The result of these operational and marketing aspects is visible in IndiGo which
has a market share of 30% and the highest passenger load factor of close to 90%
compared to 77% of JetLite and 81% of SpiceJet. This means better revenue for
IndiGo compared to its competitors.

II.

Fuel burden