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2012

INTRODUCTION

IndiGo is a private, low-cost airline based in Gurgaon, Haryana, India. Since

commencing operations in August 2006, it has established itself as one of India's

leading airlines using its model of efficient, low-cost operations and by attracting

customers with low fares. IndiGo has the second largest share in India's domestic air

travel market, only behind Jet Airways and as of October 2011 it is the only airline in

India making profit. IndiGo has grown faster than any other low cost carrier in South

Asia. The airline has also acquired three parking spots in Indira Gandhi International

Airport and Chhatrapati Shivaji International Airport. Following Indian regulations,

Indigo received its license to operate international flights upon completing five years

of operations. Its main operational hub is New Delhi's Indira Gandhi International

Airport. Indigo has been awarded numerous airline and travel industry awards.

Indigo won the Skytrax Central Asia's best low-cost airline award in 2011. On

February 15, 2012, the civil aviation ministry of India has lifted the barriers on the

carrier when was set over a year ago to defend the sinking national flag carrier from

competition on the International routes.

HISTORY

The parent company of IndiGo Airlines is Gurgaon based InterGlobe

Enterprises. It commenced its operations from the year 2006. Indigo had placed a

firm order of 100 Airbus A320-200 aircraft during June 2005 in plans to commence

operations in mid 2006. Indigo took delivery of its first Airbus A320-200 aircraft on 28

July 2006, nearly one year after placing the order, and commenced operations on 4

August 2006 with a service from New Delhi to Imphal via Guwahati. By the end of

2006, the airline had six aircraft. Nine more aircraft were acquired in 2007 taking the

total to 15. By the December of 2010, Indigo replaced the state run flag carrier Air

India as the top third airline in India.

Corporate culture:

Vision

The vision of Indigo is to give a hassle free travel experience, on time flights with affordable fares.

Mission

The carrier now has bold plans to become one of the country’s top operators in the international market the state run flag carrier Air India as the top third airline in India in 2010.

ValuesThe values of the interglobe group are integrity, customer orientation and future mindedness.

Corporate Structure

Aditya Ghosh - President

Riyaz Peermohammad – CEO

SSanjay Kumar – Chief Commercial Officer

Cpt. KPS Nair – Chief of Flight Safety

Sanjeev ramdas – President, customer services and Airport Operations

COMPETITORS:

1. Go Air

2. Spicejet

3. jet Airways

4. JetKonnect

5. Jet Lite

PESTLE ANALYSIS

A PESTLE analysis is an analysis of the external macro-environment that

affects all firms in an industry. P.E.S.T.L.E is an acronym for the Political, Economic,

Social, Technological, Legal and Environmental factors of the external macro-

environment. Such external factors usually are beyond the firm's control and

sometimes present themselves as threats. For this reason, some say that "pest" is

an appropriate term for these factors.

Political Factor

Liberalization of the Sector Excise Duty and Sales Tax on Aviation Turbine Fuel Modernization of Airports Interface form Other Agencies 

Economic factor

Interest rate movement Increasing Oil prices RecessionInvestments in the Sector

Social factors

 Developments in Airport Cities  Employment Opportunities  Ensuring a Level Playing Field  Safety Regulation Varied income group Varied age group

Technological factors

Growth of Electronic Ticketing 

Satellite based Navigation Systems 

Environmental

Carbon offsettingLand issues

Legal

Different legalities of different countries

SWOT ANALYSIS

Strengths

Strong backing Promoters

Only LCC to make consistent profits

Indigo has high brand awareness and brand equity.

Cost leadership: Successful implementation of low cost strategy.

Highly efficient management that ensures high rate of on- time

arrivals.

Continuous innovation to improve on non price factors.

Tie-up with hotels.

Ease of ticket booking for customers.

Weaknesses

Scope of product differentiation is less.

Benefits of the innovations implemented by Indigo to provide

better services to the customers are short-lived, as these can be

easily imitated by the competitors.

Indigo is not exploring the untapped domestic air cargo market.

Not on too many routes.

Opportunities

Opening up of International Skies.

Largest Market share among LCCs in Indian Market.

Middle Class taking to the skies.

Threats

Plenty of new LCCs to compete with.

Rising Labour costs.

Rising Fuel Costs.

MARKET SHARE

Indigo is one of the top performers in the airline industry on back of good,

economical and timely services. IndiGo currently holds 19.6%.

Financial Information

IndiGo, owned by InterGlobe Aviation Pvt. Ltd, in its annual filing to the Directorate General of Civil Aviation Stated that its profit rose to Rs. 650 crore from Rs. 551 crore, with this the airline had made a third straight year of profit for the carrier that began operations in 2006.

If IndiGo sold its all airbuses A320s which it ordered in 2005, the company can earn about $48 million, based on $3 million a plane in revenue from sales and leaseback premium alone

Due to the low costs and increase in passenger traffic IndiGo has seen a 48% increase in revenue in 2011 for IndiGo Airlines.

Apart from IndiGo, the other low-fare carrier, SpiceJet was the only one that made a profit during the year 2011, its profit was Rs101.16 crore. Market leader Jet Airways (India) Ltd, including JetLite, were among the ones who made losses.

IndiGo’s total revenue rose 48% to Rs3,946 crore on expenses of Rs3,229 crore. The carrier made Rs121 crore in non-operating revenue, potentially from sales and leaseback of aircrafts.

The IndiGo charged approximately Rs3,508 average airfare from 9.46 million passengers, based on total passenger revenue of Rs3,518 crore.

This has made IndiGo one of the only two airlines which had earned profit in the financial year of 2011.

Core Competence and Competitive Advantage

Core Competence

The

Business Level StrategiesSegment -

Cost Conscious Passengers

Target Group

Lower Middle Class / Middle Class

Positioning

Low Cost No Frills