7/27/2019 Final Indigo Ppt
1/26
Mihir HombalkarPrathamesh KulkarniPrachi VajaniDeepesh Chhabra
Pranil DeoneAnand Lihinar
7/27/2019 Final Indigo Ppt
2/26
Indian airlines lost an estimated USD1.65 billion on revenueof USD 9.5 billion in FY2013
India is currently the 9th largest aviation market handling121 million domestic and 41 million international passengers
The air transport in India has attracted foreign directinvestment (FDI) worth US$ 456.84 million from April 2000to July 2013
Foreign Equity & Untapped Potential of Tourism
7/27/2019 Final Indigo Ppt
3/26
29.7
25.3
19.2
17.5
8.3
Market Share of players in Aviation Industry (As of July
2013)
IndiGo
Jet Airways-Jet lite
Air India Domestic
Spice JetGo Air
7/27/2019 Final Indigo Ppt
4/26
Indias largest low fare Carrier
IndiGos Technical Dispatch Reliability is 99.91% making
it the airline with the least number of cancellations inIndia
447 daily flights connecting 34 destinations
Six-fold increase in its net profit to Rs 787 crore for theyear ending March 2013
7/27/2019 Final Indigo Ppt
5/26
PORTERS Five Forces ModelPESTLE AnalysisSWOT Analysis
7/27/2019 Final Indigo Ppt
6/26
Threat of New Entrants1. Government Regulations2. Product Differentiation
3. Set Up Costs4. Resources
Bargaining Power of Suppliers1. Duopoly of the two major Suppliers2. Only 4 suppliers for ATF3. Threat of forward integration
7/27/2019 Final Indigo Ppt
7/26
Bargaining Power of Buyers1. Highly Fragmented Industry2. Not much Product & Service Differentiation
Competitive Rivalry1. Mature Industry with very little growth2. No Customer Loyalty3. Limited Scope of Product & Service Differentiation4. Exit Barriers
Availability Of Substitutes1. Railways but not a very powerful Substitute2. Other low Cost Airlines
7/27/2019 Final Indigo Ppt
8/26
Political/Legal factors 49% FDI in domestic airline sector Slow growth of airport infrastructure, Lack of government
initiatives stalling the growth AAI plans to invest massively in next 5 years up to US $ 3.07
billion in metro and non metro airports
Economic factors Business cycles impact airline industry( treated as luxury
during economic downturn) High fuel prices and surging taxes Industry operates under High Cost of Capital Slowing of the economy leading to underutilized capacity
7/27/2019 Final Indigo Ppt
9/26
Social factors Indian population is going through a transition phase Rise in income level of Tier 2 & 3 cities Status symbol
Significant rise in number of tourists Technological factors Growth of e-commerce & e-ticketing Reduced check in time, helping aircrafts achieve maximum air time The CAT technology has helped pilots to take off even during low
visibility hours Environmental factors Increase in global warming Dependency on atmosphere & Climatic condition
7/27/2019 Final Indigo Ppt
10/26
Turnaround time 31 minutes
Load factor Highest of 89.40%
Low frills Low operating cost structure
Hub and spoke model for flights
Highest no. of seats and light in weight
7/27/2019 Final Indigo Ppt
11/26
High safety Record Brand Awareness
Well trained staff
Backing from promoters
Successful implementation of low cost strategy
Highly efficient on-time arrivals (86%)
Tie-up with hotels
Indigo ramp
Elimination of middlemen i.e. Ticket agents
7/27/2019 Final Indigo Ppt
12/26
Scope for differentiation is low Services can be quickly imitated
Not much international flights Do not have as many routes as competitors Have not explored cargo market
7/27/2019 Final Indigo Ppt
13/26
Increasing middle classpreferences
Domestic cargo high
demand Only domestic player
to show positive signs
Increase frequency
THREATS
Fuel price hike
Increase in taxes
Economic slowdown
Advancing technology Poaching of work force
High exit barriers
OPPORTUNITIES
7/27/2019 Final Indigo Ppt
14/26
7/27/2019 Final Indigo Ppt
15/26
Tangible Resources
Physical Resources
Human Resources
Technology
Resource Financial Resource
IntangibleResources
Reputation
Social capital
Brand Awareness
EmployeeRelationship
7/27/2019 Final Indigo Ppt
16/26
Financial Health
High Cash Flow
Fourth Indian low costcarrier to operateoverseas
Profitable airlinecompany in India - Orderof 180 new aircrafts A-320 USD 15 Billion
Low-Fare Flight
Best low cost airline ofIndia & Central Asia
Scored a hatrick atSKYTRAX World AirlineAwards 2012
Cost Effectiveness
Operating on secondaryairport
E-ticketing
Fewer employees peraircraft
More seats per aircraft
Selling and leasing backplane
On-time flights
Always on time andoften before time
Low Turnaround Time
Turnaround time forIndigo is less than 30minutes
No complimentary
meals
7/27/2019 Final Indigo Ppt
17/26
7/27/2019 Final Indigo Ppt
18/26
7/27/2019 Final Indigo Ppt
19/26
7/27/2019 Final Indigo Ppt
20/26
One type of airplane- brand new Airbus A320s One type of fare low One type of customer service professional One type of routes serving destinations within India One type to deal with delays and cancellations - honestly
7/27/2019 Final Indigo Ppt
21/26
Be visible go all out to project yourself as future MarketLeader
Go Local Connect with middle class Focus on core competencies and market them Aim to compete with Railways in the long run
7/27/2019 Final Indigo Ppt
22/26
Indigo purchased the aircrafts, then sold them to intermediary and thenhire the fleet on lease from then on contractual basis.
Use single configuration aircraft. Indigo preferred airbus over Boeing as the fuel efficiency of the former is
greater than the latter
Advertising Strategies Airport Hoardings Social Media
Collaboration with Multiplexes Magazines Sponsoring Events Use of Regional Languages
7/27/2019 Final Indigo Ppt
23/26
Low cost and High Quality ServicePrice to be differentiated with respect to days before the travelNo frills such as free food/ drinksTargeting segments locally based on seasons and festivals
7/27/2019 Final Indigo Ppt
24/26
Diversification Indigo which began its services in 2006, has started its preparation for
international expansion. In January 2011, Indigo signed a majorprocurement deal with Airbus to buy 180 A320s in one of the largest everdeals of its kind
IndiGo Airlines offering a diverse array of packages for its passengers:Holiday packages, business packages, religious packages, God's OwnCountry, hill station trips and Goa's sun & sand.
Recently launched EMI options for consumers thereby expanding the
potential customer base
Mergers and Acquisition Indigo bought Republic Airways Frontier for $36 Million
7/27/2019 Final Indigo Ppt
25/26
Threat of ImitationImitation of business modelEconomies of ScaleImitation of aircrafts Human Resource imitation-Cat 3 compliant pilotsCost Leadership rises threat of
retaliationHigh Imitation Lag
High power of aircraft
suppliers- Boeing and AirbusLimited number of suppliersfor ATF
Government InterferenceHigh power of supplier ofpilots due to shortage ofpilots
Railways
Technological
Advancement
Premium Airlines like Air
India, Jet Airways
Either of the LCC likeSpicejet, GoAirAdded Value
AppropriatedValueTraining
Strikes
BenchmarkingSustaining cost leadershipby maintaining economies ofscale and resources
Payment System-incentives
Threat of SlackThreat of Hold Up
Threat of Substitution
7/27/2019 Final Indigo Ppt
26/26