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Successful strategies employed by Indigo
Connecting the Dots
Group O1
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
Timeline
2002-03: Moderate competition with two players2006-07: Intensified competition with entry of low-
cost carriers (LCCs); 9 playersHigher fuel prices and manpower costs eroded
profitability2007-08: Industry losses of Rs.49 billion;
deterioration of capital structure and liquidity crunchConsolidation phase (Air India+Indian; Jet+Sahara;
Kingfisher+Air Deccan)Growing market share of LCCsIncreased capacity utilisation aided efficient players
post profits in 2010-11
State of the Industry
Source: CRISILResearch
Profitable even in the bad years of 2008-2010Net profit estimate of Rs.600 crore on revenues of
Rs.3500 crore in 2010-11Grown at a steady clip – addition of eight planes
every yearMarket leader – 23.3% market share in 2011-12Successful foray into the international markets
Better Performance….which parameters?
One service – one fleet (63 Airbus A320s)Higher fuel efficiencyAlliance with Airbus for maintenanceAsset light leasing model IndiGo has 96 employees per aircraft; lean-and-
mean vis-à-vis to Air India's 250 a planeOnly Indian airline to adopt RNP approach: Fuel
and cost savings; Faster turnaround at airportsGradual expansion Lower flight to market ratioCompetitors have only been low fare and not low
cost
Cutting Costs
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
Differentiating Service
Overall Low Cost
Broad Differentiatio
n
Focused Low Cost
Focused Differentiatio
n
Best Cost Provider
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
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
Backbone….contd
Competitive Advantage
Resources Valuable RareCostly to Imitate
Exploited by the
OrganisationAircraft Y N N YHR Y Y N Y
Fuel Y N N YBrand Equity Y Y N YOperations Y Y Y Y
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 personnelPoint-to-point carrierExtensive government interferenceATF fuel prices
Risks
Indian market still under-tapped
Going regional - smaller cities
Extension of the current strategy
Opportunities
Going strong and interesting times ahead…..
Thank you….Group O1