Saturday, August 17, 2019

Indigo Airlines

While the other airlines in the industry purchased rivals, flew different models of planes and tried to offer costly services, Indigo stuck to single model planes with a reputation of being a no frills airline. Indigo has stuck to operating the world’s largest selling single-aisle aircraft, the Airbus A320. This has helped the airlines to not just survive the economic slump in the industry but infact to post profits year-on-year end. Capacity utilization of IndiGo airlines fleet The utilization rate of IndiGo is around 16hours a day which is infact one of the highest in the industry. Thus even without using too many airplanes, the airlines can provide its ferrying service to a larger number of people. On an average its passenger loads have been around 90%. High seating Capacity of aircrafts Indigo operates a fleet of 62 aircraft and has been expanding its fleet rapidly. Even though the number of aircrafts are lesser than some other airlines, it offers higher seating capacity as most of its aircrafts are 180 seaters rather than the standard 60 – 70 seater aircrafts of most airlines. Indigo’s fleet is approximately 6. 5% of India’s combined fleet but it serves a market share 27%. Young fleet of aircrafts One of the strengths of Indigo Airlines is its fuel efficient young fleet of aircrafts as compared to other airlines. A young fleet of aircrafts has ensured increased service levels, high operational efficiency and low maintenance costs. Indigo recently bought 100 new A-320 jets from Airbus. Such volume purchases have helped Indigo in cutting its cost by availing volume discounts. Superior technology The consistent use of superior technology has helped Indigo achieve its USP of on-time performance. By making use of technologies such as ACARS Aircraft Communications Addressing And Reporting System), an automatic message is triggered from the aircraft to control centre and the departure time recorded immediately. Similarly during landing, this technology sends of an automatic message to the control centre which immediately records its arrival time. This has helped the airlines monitor and maintain strict on-time schedules. Excellence in operations Indigo has be en able to sign favorable contracts with engine, airframe and other critical component manufacturers securing warranty claims against defects. This has enabled indigo to minimize technical snags and enjoy superior operational efficiency. Owing to this Indigo has also been able to bring down its maintenance costs. Superior customer service One of the greatest strengths of Indigo airlines is the superior service it offers to its customers. The airline has the highest 95. 3 per cent on-time performance record and the lowest number of complaints per passenger. It offers unique services such as step-less stairs (walking ramp), web check-in, booking capability on handheld devices and automated real-time flight status on handheld devices. Human resources Another strength that Indigo airlines enjoys is its excellent management of human resources. It has a single central training program which gives training to its employees on functional skills, soft skills as well as leadership qualities. With a very robust system of internal promotions and flexibility in horizontal movement across the company, the airlines has seen zero or almost negligible attrition rate over the past server years. Tie-up with hotels Major hotels like Sarovar hotels etc have tied up with Indigo Airlines in order to provide a packaged service to customers. This type of bundling of services has created a value addition to customers who wish to sync their travel times and accommodation timings in order to receive the best deals at reasonable costs. This has in-turn increased the customer base for both the airline as well as the hotels. Superior brand image Good advertising and marketing strategies have increased Indigo’s brand recall and have helped in creating a superior brand image. With very high operational excellence, cost control, great experience, lowest cancellations Indigo enjoys a superior reputation amongst its customers, difficult for the competitors to replicate. Its unique advertising and marketing efforts have also helped in this regard. Weaknesses Easily Imitable Since Indigo has not concentrated too much on providing a differentiated experience with no-frills and on-time being their central theme, this is imitable by other players in the industry and thus a possible threat to its position as a cost leader. Limited number of International Routes Indigo Airlines operates on a limited number of international routes. This restricts the options and choices for international travelers. Only about 14% of its total fleet flies international. This is very low compared to its rivals and the general industry standard for airlines. International routes is an untapped segment where Indigo has not ventured too much into yet. Restricted Services In an attempt to operate as a low-cost airline, Indigo does not operate in many routes where the profit margins are below their set standard. This in turn in-conveniences many passengers. Also, the no-frills element of their services leads to other passenger inconveniences such as cramped seats, lower comfort during travel, non-refundable flights and higher charges of excess baggage.

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