DWO Indigo Airlines Case

BY Group 9 -

ABM/14/039 KARANVEER VERMA

PGP/33/362 AMAN MITTAL

PGP/33/379 MADDILA GOUTHAM

PGP/33/370 DEBARATI KABIRAJ

PGP/33/389 P V S ANURAG

PGP/33/405 TANMOY ADHIKARY

Timeline The Indigo Story

1st Domestic Indigo Entry Highest Load factor

air route Joint Venture Indigo - highest no.
First route between between Inter-Globe of passengers
Karachi and Chennai and private investor carried, 2nd highest
became operational Rakesh Gangwal. in terms of miles

1912

2006

2011
1991

2009

Open skies Policy
Government opened
the market for
private players
2012
Reported Profits Market Leader
1stLow cost airline to Became the market
report profit due to leader with 27.6%
high operational market share.
efficiency

4 6 7
Competitive Advantage
Highly Responsive
Product
Cost Leadership Customer
Differentiation
Orientation

Efficient Operations
Good Asset Effective HR
Ex. Highest On Time
Management Management
Performance

Market Positioning as Excellent Customer

No Frills airline
efficient LCC Service
 Good Asset Management

Ordering a large number of aircraft gets good discounts from manufacturer

Sale and Leaseback Sale & Leaseback model provides good working capital
Model
Results in young fleet with minimal maintenance expense requirements1

Fuel efficient Airbus A320s in fleet

Single Aircraft
Single type of aircraft offers better standardization of training and
maintenance etc.1

Contract with Airbus to carry out maintenance on demand

Outsourced
maintenance work Strong service level agreements ensure least time wasted by idle aircraft
waiting for repair1

1. Indigo Airlines Case Richard Ivey School of Business Strategies of Indigo (Aircraft Management)
 Focus on Lean Operations

Collaborated with Quovadis, AAI and DGCA to implement safer and fuel
efficient landing system1
Flight Path
Improvement Savings upto106 gallons per landing & reduced greenhouse gas emissions

Market leading turnaround time ~20min

Helped serve more markets with lesser fleet Better Fleet Management
Hub and Spoke model
Single17.6% market share achieved with just 38 aircraft2

No hot meals served on board, No magazines available

Low Frills Airline
Minimizes cutlery and heating equipment requirement3, thus reducing fuel
costs

1. Indigo Airlines Case Richard Ivey School of Business Growth and Expansion Strategy (Operational efficiency)
2. Indigo Airlines Case Richard Ivey School of Business Growth and Expansion Strategy (Hub and spoke model for flights)
3. Indigo Airlines Case Richard Ivey School of Business Growth and Expansion Strategy (Low frills efficiency carrier)
 Efficient job
Improved Customer
HR Policies performance (~0%
satisfaction
attirition)

HR Policies Training & development

Hired CTC Aviation group to ensure right

Robust appraisal system1 quality of training2

On-time salary Developed training programs in sync with

organizational culture

Promotions of managers & raising the

designation of pilots Hired competent pilots from Kingfisher
airlines saving training costs3

Awarded with Best company to work with

Centralized training program operations

1. Indigo Airlines Case Richard Ivey School of Business Growth and Expansion Strategy (Operational efficiency)
2. Indigo Airlines Case Richard Ivey School of Business Customer Service
3. Indigo Airlines Case Richard Ivey School of Business Further cost savings through HRM)
 Challenges
Internal External

Few incompetent pilots used Higher competition in international

inappropriate landing procedures1 market International
Safety & Training
Competition
Questions about passenger safety Reservations about pure LCC model

Leasing has become a common

Changing positioning from LCC to
strategy
Hybrid carrier2 Confused
Leasing Strategy
Positioning Accounting Standards changes
Not the lowest price anymore!
make sale & leaseback unattractive3

Using second type of aircraft -

Changing asset Maintenance Challenges
Low oil prices have made fuel Volatile Oil Prices
strategy efficient A320neo irrelevant

1. Indigo Airlines Case Richard Ivey School of Business Future Challenges and Threats
2. Indigo Airlines Case Richard Ivey School of Business Pricing Issues
3. New accounting standards likely to create turbulence for airlines The Economic Times Article 26 July, 2017
Thank you!