Connecting the

Dots

Successful strategies employed by

Indigo

Group O1
Timeline
2006:Commenced operations under InterGlobe
Enterprises Pvt. Ltd.
33 domestic destinations with close to 399 daily
flights
Sept-2011: Commenced international operations;
viz..Delhi / Mumbai to Muscat, Kathmandu, Dubai,
Singapore and Bangkok
2012: Contemplating starting regional operations
State of the Industry
 2002-03: Moderate competition with two players
 2006-07: Intensified competition with entry of low-cost
carriers (LCCs); 9 players
 Higher fuel prices and manpower costs eroded profitability
 2007-08: Industry losses of Rs.49 billion; deterioration of
capital structure and liquidity crunch
 Consolidation phase (Air India+Indian; Jet+Sahara;
Kingfisher+Air Deccan)
 Growing market share of LCCs
 Increased capacity utilisation aided efficient players post
profits in 2010-11 Source: CRISILResearch
Better Performance….which parameters?
 Profitable even in the bad years of 2008-2010
 Net profit estimate of Rs.600 crore on revenues of Rs.3500
crore in 2010-11
 Grown at a steady clip – addition of eight planes every
year
 Market leader – 23.3% market share in 2011-12
 Successful foray into the international markets
Cutting Costs
 One service – one fleet (63 Airbus A320s)
 Higher fuel efficiency
 Alliance with Airbus for maintenance
 Asset light leasing model
 IndiGo has 96 employees per aircraft; lean-and-mean vis-
à-vis to Air India's 250 a plane
 Only Indian airline to adopt RNP approach: Fuel and cost
savings; Faster turnaround at airports
 Gradual expansion
 Lower flight to market ratio
 Competitors have only been low fare and not low cost
Differentiating Service
Cheap tickets

Great on-time performance

Clean and fresh airline service – a differentiator

Making simple promises and KEEPING them too

Trusted brand - high quality at lower fares

Overall Low Best Cost Broad
Cost Provider Differentiation

Focused Low Focused

Cost Differentiation
Backbone
Meticulous planning
• Route selection

• For international foray - the network planning, marketing, training

and product definition began even before completion of 5 years

• Appropriate flight timings – strict check-in times of hotels in

Singapore and Bangkok

• Domestic strategy extended

Backbone….contd
Motivated workforce
• Among top 50 best work places in India

• Lowest attrition in the industry

• Face of the company in advertisements

• Employees working in multiple roles

Backbone….contd
Financial prudence
• Low dependence on debt

• Asset light leasing model

Effective communication
Competitive Advantage
Exploited by
Costly to the
Resources Valuable Rare Imitate Organisation
Aircraft Y N N Y
HR Y Y N Y

Fuel Y N N Y
Brand Equity Y Y N Y
Operations Y Y Y Y
Risks
 Domestic competition set to intensify with FDI nod
(AirAsia – Tata JV)
 High competition in the international sector – AirAsia, Air
Arabia, and Air India Express
 Poaching of employees
 Availability of pilots and skilled personnel
 Point-to-point carrier
 Extensive government interference
 ATF fuel prices
Opportunities
Indian market still under-tapped

Going regional - smaller cities

Extension of the current strategy

Going strong and interesting times
ahead…..

Thank you….Group O1