BY ZIL SHAH

Aviation Industry in India

The Indian aviation industry is one of the fastest growing aviation
industries in the world. India ranks fourth after US, China and Japan
in terms of domestic passengers volume.
 1932 : JRD Tata launched TATA Airline.
 1948 : Air India International came in- being between Indian Govt.
and Air India(TATA Airline).
 1986 : Private Sectors players permitted as Air taxi operators like
Jet, Air Sahara etc.
 1994 : Private Carrier permitted to operate scheduled services.
 2003 : Entry of low cost carriers like SpiceJet, IndiGo, GoAir etc.
Introduction
 IndiGo is an Indian Low-cost airline with only economy class seating.
 It’s headquarter is at Gurgaon, India.
 It is the largest airline in India in terms of passengers flown with market share of
36.5% as of September 2015.
 This airline offers more than 647 daily flights connecting to 38 destinations.
 It presently operates a fleet of 98 aircraft belonging to the Airbus A320 family.
 In 2014, IndiGo carried 21.4 million passengers in the domestic sector alone.
 India’s best on time performance and least flight
cancellations.
 It is also one of the fastest growing airlines in the world.
History
 IndiGo was set up in early 2006 by Rahul Bhatia and Rakesh S Gangwal.
 IndiGo placed a firm order for 100 Airbus A320-200 aircraft in June 2005.
 IndiGo’s first Airbus commenced operations on 4 August 2006 with a
service from New Delhi to Imphal via Guwahati.
 By December 2010, IndiGo replaced the state run flag carrier Air India as
the top third airline in India with market share of 17.3%.
 In 2011, IndiGo placed an order for 180 aircraft Airbus A320 aircraft in a
deal worth US$15 billion which pushed up the percentage of Airbus aircraft
in India to 73%
 On 17 August 2012, IndiGo became the largest airline in India with market
share of 27%.
 In January 2013, IndiGo was the second fastest growing low-cost
carrier in Asia behind Indonesian airline Lion Air.
 In August 2013, the Center for Asia Pacific Aviation ranked IndiGo
among the 10 biggest low-cost carriers in the world.
 In August 2015, IndiGo placed an order of 250 Airbus A320neo
aircraft worth $27 billion, making it the largest single order ever in
Airbus history.
 IndiGo announced a Rs.3,200 crore initial public offering on 19th
October 2015, scheduled to open on October 27 2015.
Location
Hubs
 Indira Gandhi International Airport (Delhi)
 Visakhapatnam International Airport (Visakhapatnam)
Secondary hubs
 Chhatrapati Shivaji International Airport (Mumbai)
 Netaji Subhas Chandra Bose International Airport
(Kolkata)
Focus cities
 Chennai International Airport (Chennai)
 Kempegowda International Airport (Bengaluru)
 Rajiv Gandhi International Airport (Hyderabad)
destination
 IndiGo operates to 38 destinations, 33 in India with more than 647 daily
flights.
 In January 2011 IndiGo received a license to operate international flights.
 IndiGo's first international service was launched between New Delhi and
Dubai on 1 September 2011.
 The international services were expanded to serve Bangkok, Singapore,
Muscat and Kathmandu.
 IndiGo is considering the launch of flights between Kolkata and Kunming,
China.
How INDIGO makes MONEY ???
 Go local-connect with the middle class.
 It operates on routes which have high traffic.
 IndiGo’s strategy is to provide more capacity on select routes, rather than
spread itself thinly over several.
 It offers only economy class seating.
 IndiGo does not provide complimentary meals in any of its flights, though
it does have a buy-on board in-flight meal programme.
 No In-flight Entertainment Systems.
 Only Indian airline to adopt Required navigation performance (RNP)
approach: Fuel and cost savings; Faster turnaround at airports.
 The airline has trained its crews to de-plane the passengers in 6 minutes
and unload the baggage in 10 minutes. It regularly achieves Turn
around times of around 22-25 minutes(Industry Average being
much more than 30 minutes).
 Limited
No
Model No meals passenger
service connection
with other
airlines

IndiGo
16 min the No
gate frills
Frequent & turnaround Airlines
Point to
reliable
point
departures
routes

Highly
Low ticket
productive Standard
prices
crew fleet of
Trained
A320
pilots

Limited
Highly High Internet use of
Regular
skilled aircraft ticket Travel
training
crew utilizations booking Agents.
Key success factor
Indigo's success can be attributed to certain things which has done
differently as compared to others.
 Single type of airplane to reduce training and service cost.
 High Passenger load factor – light weight , No. of seats increased.
 On time performance.
 One of the lowest Cancellation rate in industry.
 No frills such as free food/drinks, lounges.
 Employees working in multiple roles.
Rahul Bhatia
 The co-founder of the biggest airline in India is known for his smart
moves. With a market share of 51.12%.
 IndiGo has redefined the private airline space with its on-time
performance and innovative packaging.
 IndiGo Airlines became India’s largest domestic airline in terms
of market share by taking advantage of troubles at Kingfisher
Airlines and Jet Airways.
 IndiGo recorded a profit of Rs 550 crore in 2009-10 whereas other
airlines were running losses.
 For five years in succession, IndiGo has won the Skytrax Awards for
being the ‘Best low-cost carrier.
 He has already made IndiGo the biggest success story of Indian
aviation industry.
Financial Highlights
IndiGo was set up in early 2006 by Rahul Bhatia of InterGlobe Enterprises and
Rakesh Gangwal. InterGlobe holds 51.12% stake in IndiGo and 48% is held by
Gangwal's Virginia-based company Caelum Investments.
16000

14000

12000
(in crore rupees

10000

8000

6000

4000

2000

0
Revenue Net income
2013 2458 787
2014 11117 317
2015 14320 1304
IPO Details
 Issue Opens On: Tuesday, October 27, 2015
 Issue Closes On: Thursday, October 29, 2015
 Issue Price Band: Rs.700– Rs.765
 Face Value Per Share: Rs.10
 Issue Size: Rs.3,108 crore
 Proposed Listing: Bombay Stock Exchange and National Stock
Exchange.
 Lead Managers: Citigroup Global Markets India Private
Limited, J.P. Morgan India Private Limited, Morgan Stanley
India Company Private Limited, Barclays Bank PLC, Kotak
Mahindra Capital Company Limited, UBS Securities India
Private Limited.
Competitors
Passengers carried, April 2015
30

25

20
(In lakhs)

15

10

0
Indigo Jet Airways Air India Spice Jet Go Air Others
Market share, April 2015
Others,
6.80%
Go Air,
8.80%

Indigo, 37.80%
Spice Jet, 10.80%

Air India, 16.20%

Jet Airways,
19.60%
Bibliography
 http://www.market-width.com/Air_Traffic_India-2015-April.htm
 https://en.wikipedia.org/wiki/IndiGo
 http://www.simpleinterest.in/IndiGo-ipo-review-and-recommendation/
 https://book.goIndiGo.in/
 http://www.mapsofindia.com/my-india/india/52-top-indian-
personalities-of-2014
 http://indiatoday.intoday.in/story/a-guide-to-the-high-and-
mighty/1/134071.html
 http://articles.economictimes.indiatimes.com/2015-09-
11/news/66434666_1_aditya-ghosh-IndiGo-crore