Indigo’s low-

cost carrier
operating
model

By.
Abhijit Dutta(19BSP0059)
Ankita Naik(19BSP0403)
Arati Patnaik(19BSP0483)
Ayushi Mund(19BSP0626)
Bhawana Jain(19BSP0679)
Sunayna Panigrahi(19BSP2944)
 Agend
a
01 02 04 05
03 overview 06
Recommendati
Aviation Major Competitor of the Solution ons
industry players in s analysis n case
analysis
india
 01
Aviation industry analysis
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
• First Commercial flight on January 1, 1914
• St. Petersburg and Tampa, flying a total of 23 minutes
between the two cities separated by 21 miles of bay
waters
• Tata Airlines, Indian National Airlines, Air service of
India, Deccan airways, Ambika airways, Bharat
airways, Mistry Airways, Orient Airways
• Busiest traffic (2007), Luxury, Economy and Budget
airlines
• 50.74 million passengers
• IATA formed in 1945 to regulate passenger and cargo
freight
• Maintains database of planes, fleet, crew information,
passenger documentation
 02
Major players in india
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
• Air Deccan
• Air India Express
• Air India
• Air Sahara
• Go Air
• Indian Airlines
• Indigo
• Jet Airways
• Jet Lite
• Spice jet
• Kingfisher
• Paramount Airways
 03
Competitors analysis
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
 04
Overview of the case
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
• On Feb 18, 1911, the roots of the Indian aviation industry was
laid
• In 1932, with Tata Sons Ltd, later renamed as Air India, the
aviation industry gained momentum
• By the time of independence, the country had 9 operational
airlines
• Post-Independence, Air India entered into a joint venture with the
Government of India
• Later in the year 1990, govt. introduced the “Open Sky Policy”
• By 1998, the rising infrastructural difficulties and capital
shortages led to closure of many private airlines
• The entry of Deccan in 2003, marked a major turn of events in
the industry
• Deccan entered with the strategy of low air-fare, as low as
500INR
• There were two new entrants in 2005: SpiceJet and Go Air, and
one in 2006:Indigo
• LCC came up with different service techniques to attract middle-
class passengers like free in-flight food, travel insurance and
gifts, insurance against baggage loss, cancellation and delays
• In 2005, FSC enjoyed 84% market share and LCC could only
make up to 16%
• By 2006, FSC slipped to 73%, whereas LCC managed its
foothold with 27%
• In order to capture the market share, FSC and LCC lead to an
unhealthy competition
• The increase in the operating cost made it difficult on the part of
the players to keep up with their strategy of providing low airfare
• After a mere point of time, the fare provided by FSC and LCC
were the same, as 5000INR, which made the passengers shift to
railways
• The domestic traffic, in 2007, dipped to 33%
• In the wake of the increasing troubles, LCC Started tweaking
their low-cost model to be able to survive in the Indian skies
• This was the time when Indigo emerged as an exception by
boasting of a consistent growth
 05
Solution
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
 06
Recommendation
INDIGO’S LOW-COST CARRIER
OPERATING MODEL
Thank
you