The easiest way to

become a millionaire is
to start out as a
billionaire and invest in
an airline.

Indigo

Airlines
Group 9
Avinash Kumar G034
Saurabh Mishra G040
Abhiroop Mukherjee G042
Amartya Sen
G055
Vuda Anurag Naveen
Theja
G062

PES
T
Competitive
Rivalry

Bargaining
Power of
Buyers

Threat of
new entrants

Bargaining
Power of
supplier

High

Med

High

Potters Five
Forces

Growing Middle Class (+)

Domestic Leisure Travel
(+)
Foreign Tourist (+)
Status Symbol (+)
Security Issues &
Terrorism (-)

Technological

Threat of
Substitute

Political

Low
To
Med

Open sky policy

Deregulations in different spheres
Low entry barriers to attract new
companies
FDI Limits
49% for Airlines
100% for Airports
Extensive airports development
plans

Socio-Cultural

High

Economic

Rising Income of middle class

GDP growth of more than 8% &
expected rate in 2 digits
Hike in average income.
Average salary increase of 14%
Growing Tourism Industry
Concern due to increase in ATF
prices

Modernized Airports (+)

Greenfield Airports (+)
Better handling of
Aircrafts, passengers
and Cargo (+)

Brand Strength
(Differentiation and
Relevance)

Brand Stature
(Esteem and Knowledge)

Strength

Weakness

Opportunity

Low fares
High Service Quality
Operational
Efficiency
Customer Service
Short haul flights
Fuel Efficient
Aircrafts

Less differentiation
Short lived
innovations
Untapped domestic
cargo segment
No established
alliances
Lack of product depth
and breadth

Increasing middle
class population
Increase in
domestic tourism
Booming air cargo
business
Chartered Services

T
Threat
High ATF prices
Economic
slowdown
Government
policies
Technological
advancement in
communication

Brand
Asset Valuator Model

Entry of
LFC, price
war
Increasing
Competition

Consolidation Rise of
Phase Others LFC
27%

Spice Jet; 9%

Indigo; 37%

Air India; 18%

Jet Airways; 24%

Current Market
share

Domestic market share

(%Pax-Km)

Vistara;
1%
Asia; 1%
1%
AirAir
Costa;
Go air; 9%

Sahara
Less
New players
bought Spice
by Jet
Players,
enter, still 3
Jet,
Deccan
19%
Only 3
major playerOthers
by
Kingfisher
Others
companies holding
77% 31%
34%
hold
share Kingfisher
Indigo
majority
21%
33%
share
Sahara
Air India Grp12%
47%
Jet Grp
41%

Air Deccan
17%

Jet Grp Air India Grp

18%
26%

Jet Grp
30%
Jet Grp
21%

Air India Grp

23%

Evolution of Indian competitive environment

Jet Airways

Acquired Air Sahara on

2007
First airline to develop
frequent flyer program
Introduced COD
Preferred by corporates
Mapped customer
experiences at all touch
points like booking, comfort
and baggage retrieval.
Identified the values
customer looked for
Used all media channels

Weakness
Weakness

Strengths
Strengths

Jet
The Joy of Flying
Airways

Competition from the

LCCs and other
competitors means
market share growth
is tough
Presence of other
airlines on
international routes
making it difficult to
have significant
market share

Strength Indicators
Major Routes

First Class
Internation
al

Premiere
Economy

Class of
service

Premiere
Domestic
Economy

11

11

8
9

17

8
SpiceJet

Indigo

Has created a good image among the Indian fliers

Trusted Airline by the Corporates
One of the biggest Indian airline companies with
over 13,000 employees
Operations in over 75 Indian cities and over 400
daily flights
Top of the mind brand due to excellent operations
and marketing
It also has international destinations in nearly 20
countries

Spice
Jet

Flying for everyone

SpiceJet

Pax-Km

Indigo

Strong backing by the

Promoters
LCC segment is ever
growing in the country
One of the largest low
cost carriers in India
Has a reach to around
35 Indian destinations
Good presence in the
market due to its
branding and
advertising

Weakness
Weakness

Strengths
Strengths

Major Routes

Low market share

due to presence of
significant
competition
Has limited
Dependency on
Leased assets

Revenue

Segment: Cost Conscious

Passengers
Target: Middle class
Positioning: Low costs, No Frills
Tags: Not low cost flying, but smart
flying

Consumer Decision Making

Process
Influencing Consumer
Decision making
Highest
Operating flights,
Least turn around
time
Lowest
cancellation rate

Only Single class

airline carrier
No loyalty
programs
Best in house
Customer
Service center

On Time ( Core benefit)

Low Cost
Courteous

Need
Recognition
Evaluation
of
Alternatives

Information
Search

Consumer
Participation
Courteous

Buyer
Behavior

Post
Purchase

Purchase

Omni Channel
availability
Dedicated offline
Indigo agents

Key
Differentiatin
g
Strategies

Indian Aviation Industry

Consumer Trends
Key Findings
Nearly half of those
travelling with family are
young - aged between 25
and 35 years
Organized and planned
tours are a prevalent
choice for vacations in
India
Discounted and cash-back
offers more attractive to
respondents than loyalty
points and other special
services

Parameters

Company: Vision, mission, values,

impact, strengths, weaknesses
Mission: low fares, on-time flights and a hassle-free experience
Vision:
IndiGo will continue to offer affordable fares and focusing on our
three core principles on-time performance, providing consistently low
fares, and a
courteous and hassle-free travel experience consistently.
Value:
IndiGo is built for people with things to do, places to be, people to
see - who don't want to waste time, money or energy in the process
Impact:
Market Leader with 38% market share
Only profitable airline over a period of time
Strength: High operational reliability Award-winning service On Time
Performance

Company: USP
IndiGo offers web- check in, Q-busters and self-check-in kiosks for an easy
and faster check-in
The airline introduced a new initiative called Braille guide.
A320 aircraft equipped with Sharklet fuel saving wing tip devices

Weakness :
Not on too many routes as compared to competitors
Still has to establish itself on international destinations

Source : http://biz-india.in/interview-aditya-ghosh/

Issues: Opportunities,
challenges

Opportunities:
Connecting Tier 3
cities
Chartered Services
International
routes Presently
only 5 countries

Challenges:
Load factor : Spice Jet 92.1
% Jet Airways 80% IndiGo
76.8% GoAir 75.6% as per
DGCA data
About 70% expenses are
dollar-denominated,
whereas only 15% of its
revenue in the same
currency
Keep the cost low and
continue to offer lower and
affordable fares
Close to 50 per cent of
Indigos expenses is on
buying aviation turbine fuel
(ATF)

STP and MM of Indigo

Leisure

Corpo
rate
Students/
Low income
individuals

Segmentation

Product
Individual
booking
Price
Group booking
Low cost
Round Trips
Corporate
Packages

Undifferentiated
Targeting

Multiple Segment
Specialization

Targeting

People
Place

Air hostess
attire
Limited routes
Highest
Increased
employee
flight
satisfaction
frequency per
Highest
route
customer
satisfaction

Process
Apps
Website (own
+ online
aggregators)

Physical
Evidence
Hello 6E
Spin off
products and
baggage tags

Promotion

Real
Positioning
Virtual
Positioning

Positioning

Recommendatio
ns

Increase leg
space

Reduced Breakdown and inventory cost

High fuel efficiency
Low Average Age
of planes Improves turn around time

Point to point
Routing

Employee centric
approach

Premium
segment

Reduced airport charges unlike hub and spoke model

Reduced airport charges unlike hub and spoke model
Reduced complexity

Follow employee first, customer principle

Motivated employees is a must in service industry

IPO a huge success

High brand equity and premium segment would be a hit

Move to app only

strategy

Option to customize
services

Thanks!
Any questions?