SYMBIOSIS INSTITUTE OF BUSINESS

MANAGEMENT, BENGALURU

STRATEGIC ANALYSIS OF COMPANY:

UNDER THE GUIDANCE OF

Dr. D. Subramaniam

PREPARED BY:
Group 05 – Section:A
Neeraj Garg-19020841021
Nishtha Gupta- 19020841023
Riya Rai- 119020841026
Kshitij Anand– 19020841014
Puja Samanta-19020841024
 Introduction to IndiGo Airline
• It is headquartered in Gurgaon, India’s largest airline in terms of passengers
flown with a market share of 47.5% as of November 2019.
• Estabhlished in early 2006 by Rahul Bhatia, founder of InterGlobe
Enterprises and Rakesh Gangwal, a United States-based NRI.
• InterGlobe holds a 51.12% stake in IndiGo, and 48% is by Gangwal's
company Caelum Investments.
• Started its operations on 4th August 2006 with a service from New Delhi to
Imphal via Guwahati.
• IndiGo has a fleet of 257 planes and offers 1500 domestic flights per day
• Three Pillars:
1. offering low fares,
2. being on-time and
3. delivering a courteous and hassle-free experience

Market Share(2019)

Go Air, 10.84% Spicejet, 14.40%

Air India, 12.90%

Vistara, 4.80%

Indigo, 46.80%

Spicejet Indigo Vistara Air India Go Air

Passenger Load Traffic(2019)

95.00%

90.00%

85.00%

80.00%

75.00%
Spicejet Indigo Vistara Air India Go Air
FACTS and FIGURES about INDIGO

IndiGo has
become
synonymous with
being on-time.

Currently Largest Indian

operates flights carrier in
to 87 destinations passenger market
– 63 domestic share in 2012.
and 24
Primary hub at
international
Indira Gandhi
International
Airport, Delhi.
Does not provide
Twenty dots
complimentary
arranged in the meals on any of its
shape of an flights, though it
aircraft serves as does have a buy-on
the logo of the board in-flight meal
airline. programme.
Offers only
economy class
seating.
10 consecutive
In-flight years of
entertainment is Profitable
not available operations

Hello 6E, the in-

flight magazine
published by
IndiGo, is
available for
Recognized as passengers to read. Named as Aon’s
‘Great Place to Best Employer
Work for in for the year 2016
India’ for 8 years and 2017
in a row (2008-
Fleet of 257 aircraft
2015) including 96 new
generation A320
NEOs, 126 A320
CEOs, 25 ATRs and
10 A321 NEO.
 Mission Statement
“IndiGo is a very quality conscious airline and passenger safety is paramount to
our company’s mission and values.”

Vision Statement
To be India’s largest & fastest growing airline through 3 things:
• Affordable Fares
• On-time performance
• Hassle-free travel experience
There is enormous potential for the airline industry, in a country like India
where only a single-digit percentage of the 1.3 billion-strong population
flies, and where more and more people are taking to the skies amid rising
incomes and the sector's expansion. India’s aviation market is
continuously growing and expected to become the third-largest in the
world by 2025. The country has had the world's fastest-growing domestic
aviation market for the past three years, according to the industry body. It
forecasts that air passenger numbers to, from and within India will more
than triple over the next 20 years to more than 500 million passenger
journeys a year.
 PESTEL ANALYSIS
• Political /Legal Factors
✓ The government has opened up the Indian skies by allowing up to 49% FDI in Domestic
Airlines, which is expected to give an impetus to the sector, which is reeling under
immense cost side pressures.
✓ Government allowing the direct import of ATF is another move in the right direction
to decrease the operating costs
✓ Micro-managing by the government is seen as an excellent negative for the industry as
the airlines are not given enough freedom to run their operations
✓ The slow growth of airport infrastructure because of government impasse
✓ Lack of government initiatives stalling the growth of the sector.
✓ Overall the government is slowly waking up to the issues plaguing the sector and is
taking few steps to improve the health of the industry, Indigo which is the market leader
in the LCC segment, stands to be benefitted the most.

• Economic factor
✓ The slowdown of the economy is a huge negative for the industry as the capacity is
getting underutilized and the companies are being forced to reduce the ticket prices to
reduce the capacity wastage
✓ Consistently high oil prices, along with high taxes, contribute significantly to the
operational costs.
✓ The depreciating value of rupee is adding to costs as a substantial portion of other
operating expenses like lease rentals, maintenance, ex-pat salaries and a part of sales
commissions are USD-linked or USD-denominated
✓ The industry operates under the high cost of capital, which again adds to the operational
costs, but the positive side for indigo airlines is that it is in a far better position
financially than the competition, which helps it to raise capital comparatively at a lower
cost.

• Social factors
✓ Changes in the travel habits of people have far-reaching implications in the airline
industry. The airlines have to recognize individuals from varied income groups and
should serve them accordingly, especially in a country like India.
✓ India being a land of extremes and having population belonging to different cultures
and traditions; airline need to choose the destinations, food offerings, etc. keeping in
mind their tastes and preferences
✓ With the income levels rising in the Tier-2 and Tier-3 cities, there is a demand being
generated for air connectivity in these cities also.
• Technological factors
✓ The airline industry is in the process of adopting a new standard for distributing airfare
information which the IATA has termed as NDS which stands for New Distribution
Capability which will help the airlines to tailor the services to each customer and will
add value to both the airline as well as the customer
✓ Growth of Electronic ticketing satellite-based navigation systems
✓ Leveraging technology has made check-in times to reduce which has contributed to
efficiency improvements for the airlines
✓ The AAI has been developing modern communication, navigation, surveillance, and air
traffic management systems for improving India's aviation sector, which will help the
country meet the expected growth and increasing demands for air passenger and cargo
services over the next decade.

• Environmental
✓ With air traffic growing, ecological concerns are also gaining growing importance.
More technological and operational improvements are necessary to outweigh the
impact of traffic growth to reduce the environmental footprints of the aerospace
industry.
✓ The two main environmental issues associated with aviation are noise and emissions.
Within emissions, the distinction is to be made between local air quality and climate
change.
✓ Noise: The significant sources of aircraft noise are the aircraft’s engines and,
particularly during the approach, airframe noise when the aircraft’s flaps/slats are fully
extended and the landing gear is deployed. Air traffic movements have significantly
increased and will continue to grow; as a result, aircraft noise continues to have a very
significant environmental impact around airports and be a source of disturbance to the
public. Many airports have implemented noise-related charging schemes, night time
restrictions or even night curfews. The number of airports affected in this way will
likely increase further during the next decade.
✓ Local air quality: Air pollutants such as Nitrogen Oxides (NO2 and NO) and
particulate matter (PM); have been identified as key contributors from air transport to
the problems of local air quality. Exposure to particulate matter can lead to impacts
ranging from minor effects on the respiratory system to premature mortality. It is,
therefore, likely that air quality will be a significant feature in the debate concerning
additional runway capacity.
✓ Alternative Fuels: Alternative fuels should become a significant driver in reaching the
objective of carbon-neutral growth for aviation. Drop-in biofuels have been
successfully tested and are already in use on specific commercial routes. The industry
is aiming at replacing 6% of current fossil fuel with biofuel by 2020. Beyond the
complex issue of life cycle assessment, the major challenge will be to ensure that
biofuels are supplied reliably and cost-effectively to air operators.
✓ Land acquisition has become one of the pressing issues plaguing the industry because
it is stalling the building of new infrastructure which is the need of the hour
 ✓ Future objectives: The ultimate aim for the sector must be sustainable development,
where the environment is not sacrificed for growth and future generations will be able
to continue to benefit from air travel. The aviation industry has already started to tackle
this formidable task, but continued and imaginative effort is required to ensure the
sector maximizes the use of its "environmental capacity."

Significant players in the Global Aviation

Industry (Low-Cost Airliners)
• Skytrax is a globally renowned airline and airport review and ranking
consultancy which performs a survey of best airlines globally.
• Indigo featured in the list of top 10 low-cost airlines globally.

Rank Name of the Airlines Country Major Operational

of Origin Area
1 Malaysia South and
Southeast Asia

2 Great Europe
Britain

3 Norway Europe

4 USA USA

5 Malaysia South and South

East Asia
 6 Australia Australia and New
Zealand

7 Canada Canada, the United

States, Europe, Mexi
co and
the Caribbean
8 India India and Dubai

9 Ireland Europe

10 Germany Europe

Indigo’s Strategy for Global Expansion

1. Codeshare agreements with
international airlines

It has already entered into a codeshare

agreement with:
• Turkish Airlines (December 2018)
• Qatar Airways (November 2019)

A codeshare agreement enables two airlines to sell seats on each other’s' flights
to provide passengers with a more excellent choice of destinations.

Advantage for passengers

• Connecting flights: This will provide clearer routing for the customer,
allowing a customer to book travel from a point in India to Europe through
Istanbul under one carrier's code, instead of a customer booking from India
to Istanbul under one code, and from Istanbul to Europe under another code.
• This also helps the cooperating airlines in synchronizing their schedules.
Advantage for Indigo

• This will help Indigo in getting access to European markets. It can tap in
passengers who choose to fly from Istanbul to Europe and from Qatar to
other parts of the middle east.
• This will help Indigo in driving down the operational costs.

2. Order for Airbus Aircrafts (October 2019)

• IndiGo placed an order for 300 Airbus aircraft – its largest so far – worth
an estimated $33 billion to replace old planes in its fleet and operate
nonstop flights to long-haul destinations such as London and Tokyo.
• The order, one of the biggest for Airbus from a single airline operator,
was for a mix of A320neo, A321neo, and A321XLR (Extra Long Range)
aircraft.

3. Joining International Air Transport Aviation (IATA) as a member

(October 2019)
• IATA is a group of more than 290 member airlines. After it’s an order of
300 aircraft to Airbus, Indigo became a member of IATA.
• Being a member of IATA will help IndiGo grow its network faster by
building relationships with other airlines and will further strengthen the
airline’s partnership portfolio.

4. Building capacity in South and Southeast Asia

Indigo started operation between India and China in September 2019 and
furthers looks forward to
expanding into Myanmar,
Laos & Vietnam as the
Indigo model is most
natural to replicate on these
routes.
In July 2019, it started
operations between India
and Myanmar.
In October 2019, it created history by becoming the first low-cost carrier to
operate between India and Vietnam.
INDIGO'S OPERTIONS BETWEEN INDIA AND
5. Indigo’s first International Call VIETNAM

Centre in China (January 2020)

To tap the booming aviation market in China, Indigo opened its first
international call to Guangzhou in China to cater to queries from people who
speak in Cantonese, Mandarin and English.
6. Improving market share in cargo

Indigo wants to strengthen its market share in cargo, which is at nearly 34%
in the domestic market at the moment. IndiGo has set itself a target of
enhancing it to match its passenger market share.

7. Expanding into Middle east

Indigo has constantly been

working hard to get Lion’s share
of the customer traffic to the
Middle East.
Coding sharing agreement with
Qatar Airlines was a part of this
strategy.

CURRENT OPERATIONS OF INDIGO BETWEEN INDIA AND MIDDLE

EAST
Porter’s Five Forces strategy for Airline Industry
1. Threat of New Entrants (HIGH)

▪ Product differentiation: The only way to achieve differentiation is through Value

Added Services. IndiGo provides check-in kiosks, stair-free ramps, and “Q-Busters”. Hence
this is in favour of IndiGo.
▪ Low Switching Costs
▪ Limited Incumbency advantages
▪ Some Demand-side benefits of scale
▪ Easy access to Distribution channels
▪ Easy entry of Foreign Carriers in the International Routes where IndiGo operates --
Dubai, Bangkok, Muscat, Singapore, Kathmandu
▪ Govt. Regulation / Indian Civil Aviation Policy - key entry barrier
▪ Set-up cost, fuel cost and resource availability -key barriers to entry
▪ Regional Carriers start-ups.

Significant entry barriers to the aviation industry can be:

• Government regulations/Indian Civil Aviation Policy
• Setup costs
• Fuel prices
• Resource

2. Bargaining Power of Suppliers (HIGH)

▪ Buyers are highly fragmented – lowering their power
▪ Low Switching cost for most of the customers as multiple alternatives are available
▪ Air travel is perceived as a standardized product
▪ Price sensitive as travel is a meaningful share of discretionary spending
▪ Substitutes are readily available in the form of railway and roadway transport in
cases where time is not a very critical consideration.

There is a duopoly of two significant suppliers of aircraft, i.e., Airbus and Boeing.
• IndiGo comprises of Airbus-A320, and as suppliers are limited, the switching cost
is high.
• The shortage of commercial aircraft pilots in India makes the supply of pilots
limited, hence increasing their power.
• There are only four suppliers for ATF (Aviation Turbine Fuel) - IOC, Hindustan
Petroleum Corporation, Bharat Petroleum, and ONGC, and they possess more
power since their number is limited.
• The higher bargaining power of suppliers results from high brand value.
 3. Bargaining Power of Buyers (HIGH)

▪ Aircraft and Engine manufacturers are both concentrated Oligopolies

Suppliers like Dauphin,Dronier,Bell,ATR-42 do not meet the
requirement to serve low cost commercial aircraft carriers – suppliers
are very few and they have good demand of their products
▪ Airports are local monopolies with significant power
▪ Airport services – Catering, Handling, Cleaning are also concentrated in
a small number of firms, but low switching costs
▪ Powerful Labor Unions especially when controlling operations at
Network hubs
▪ Limited number of Fuel suppliers

• Buyers lack in power since they are large in number and highly fragmented.
• Furthermore, the players in a particular strategic group have minimalistic
differentiating points.
4. Competitive Rivalry (HIGH)

It is difficult to earn high returns in this sector as the aviation industry is a highly
competitiveindustry. Below are themajor reasons forthehigh competition:
▪ Very little scope for differentiation between competitors’ products and
services – closest competitors are Spice Jet, Go Air.
▪ Mature Industry with very little growth
▪ No brand loyalty demonstrated by customers
▪ Significant exit barriers

5. Availability of Substitutes (MEDIUM and Rising)

▪ The number of customers who can afford air travel are
increasing day by day specially in the emerging markets where
IndiGo is operating.
▪ Technology for Web / Video conferencing is improving –
reducing business travels
▪ Railways is an alternative, but for shorter routes – not a powerful
substitute in longer routes for the time consumption factor across India
where IndiGo operates
▪ Direct substitutes are low cost airlines like SpiceJet, Go Air – as
buyer’s switching cost is very low
• The substitute for flights are trains. But customers use flights as it is
convenient and saves travelling time.
• Many customers consider airlines as a status symbol.
• Availability of competitors like SpiceJet and Go Air- here, the threat
of substitutes is high as the switching cost is low.

VRIO Analysis of Indigo Airlines

• VALUE: By offering the lowest fares, IndiGo has created value and
thereby increased its market share. It is achieved through having a single
type of Aircraft which reduces the overall maintenance cost.
This arrangement also reduces fuel costs through fuel hedging.
IndiGo provides its staff with proper training and truly believes in
customer satisfaction. This training adds to the cost of IndiGo. Hence it is
a valuable resource but can be a difficulty to maintain its consistency.

• RARE: Owing to the low fare tickets it offers to the customers, IndiGo
has achieved the highest market share in the Indian domestic Airline
industry. The small average fleet age and a single type of aircraft is a
rarity in the Indian Airline Industry.
 • IMITABILITY: Many strategies used by IndiGo like less turnaround time
and using a single type of Aircraft are imitable. Thus, in the long run,
these differentiators will not be very useful for indigo.
• ORGANIZATION: IndiGo has created a brand name in the Indian
Airline Industry by offering brand value through unique value proposition
and strategic initiatives in just 10years of its inception.
• Good Employee Relationship is a crucial factor in sustaining a
competitive advantage. During times of slow revenue generation, other
airlines have resorted to laying off their employees. However, IndiGo has
taken a positive approach while dealing with its loyal employees at the
time of economic slowdown.

Resources and Value Rarity Imitability Organization

competencies

Low Fares Yes Yes No Yes

A single type of Yes Yes Yes Yes

Aircraft

Turnaround Time Yes No Yes Yes

Brand Name Yes Yes Yes Yes

SWOT ANALYSIS OF INDIGO

Strengths:
• Low-cost Airlines: it provides high-quality services at a low cost.
• Market Share: Indigo has a market share of 47.5%.
• Services: Wide array of services offered by IndiGo such as multi-
channel direct sales, online flight booking, round the clock
customer support through call centers and airport counters, online
flight status checking, a user-friendly IndiGo app for Android etc.
• Benefits for employees: Highly motivated and self-driven
workforce. I-fly facility deployed by IndiGo, where their new
employees are given complete real-time training on how to deliver
the best customer service.
• Corporate Social Responsibility: Indigo’s Corporate Social
Responsibility (CSR) initiative IndiGoReach focuses on three
 broad themes: Children and Education, Women Empowerment,
and Environment.
Weaknesses:
• Sustaining profits: Positioned as a low-cost carrier, therefore, it
becomes necessary to maintain pricing as well as the cost for the
airline as low as possible. However, Indigo Airlines has often been
unable to sustain its profits consistently, which can become a
weakness for the company in the upcoming years.
• Over-dependence on volumes: To sustain profits, the volumes
should always be high and businesses should not be affected by
fluctuations in demand, which means that the industry needs to
ensure that sufficient steps are taken to ensure consistent volumes.
Additional investment is required for these purposes.
• Not present on too many routes.
• International absence of the IndiGo Airlines (only select
International routes at this point – Dubai, Bangkok, Muscat,
Singapore, Kathmandu)
• Less Investment in Research and Development
Opportunities:
• Growing demand for foreign travel: Surge in the number of
people in India travelling to foreign locations both for business and
pleasure provides massive scope for the airline to expand to more
international destinations.
• New products and services
• Middle class taking to the skies
• Chartered flight services
• Cargo services
• Increasing flight frequency
Threats:
• Competition: Competition faced by airlines from brands such as
Jet Airways, Indian Airlines, Air India, Singapore Airlines, etc.
• Costing: Fuel, which is one of the critical elements in costing in an
airline, is highly fluctuating and to manage the pricing under the
dynamics of fuel prices is a threat today and even in the future.
• Changing Govt. Policies and rising labor costs
• Barriers to exit
 SO WO
1)Increased Domestic destinations
1)Going International
2)Upgrade to long-haul aircrafts as per
demand 2)Expand to freight / cargo services
3)Offering affordable international holiday 3)Diversify to chartered flight services
packages for the middle-class travelers 4)Loyalty, rewards and other customer
retention programs

SWOT
ST WT
1)Effective incentive programs to prevent 1)Create a tie-up with other LCC players
talent drain like Air Asia for the Indian customer base
2)Sign anti-poaching agreement with to provide last mile connectivity
competitors 2)Offer business class seats, continue
3)Continue to successfully hedge fuel innovation of value added services while
prices by importing. focusing on cost optimization

Strategies at various Level

Operations

Functional
Level
Strategies

Marketing Finance

A) Operations
• A single type of aircraft: Indigo’s fleet consists of A-320-232
aircraft. It results in much more flexibility as the use of the same
crew from pilots to flight attendants to the ground force helps in
cutting on training and up-gradation costs.
• Single Class: There will not be any extra expenditure and crew for
privileged passengers, and expensive lounges at airports won’t be
 required.
• Low average fleet age: Fewer maintenance costs as Indigo has an
average fleet age of fewer than three years.
• Fuel: Indigo’s aircraft try to save fuel by using software to optimize
flight planning for minimum fuel-burning routes and altitudes.
• Route Planning: Indigo operates over a fewer number of
destinations but with a higher frequency. It means Indigo can keep
its aircraft in the air for a more extended period and save up on
airport charges and customers don't have to look for connecting
flights.
• Tightly framed Maintenance Contracts: IndiGo has a Power by
the Hour contract with International Aero Engines (IAE), which
provides the engines that put the onus of performance delivery on
the manufacturer. IndiGo has similar agreements with Airbus, as
well as with the vendors for other critical components. These
contracts probably come at a premium, but it means that IndiGo
does not have to pull out planes from service for repairs and also
does not have to maintain a large inventory of spares.
B) Marketing
• Low expenditure on advertising.
• Word of mouth.
• The market share is 30%, and the highest passenger load factor of
close to 90% compared to 77% of JetLite and 81% of Spice Jet.
This means better revenue for Indigo comparatively.
C) Financial Aspects
• Indigo has gone on record to tell that the company has practically
no debt.

Corporate level strategies

• Range and diversity: IndiGo Airlines operates 78 planes for 36
destinations- higher frequency.
• Corporate growth: IndiGo has Created its blue ocean through the
implementation of innovative and advanced techniques like
“check-in counters” for passengers having only cabin baggage so
that they need not wait in lines and can check-in with an indigo
official with a handheld device directly.
• Engagement with travel web-portals and collaboration with
hotels. E.g., Indigo gives a 10% discount on the next booking if
 customers stayed in any of the tie-up hotels.
• Professional Airline management: Paid attention to its corporate-
level strategies right since its inception.
• Change in organizational structure: Indigo recruits a lot of pilots,
cabin attendants, and supporting staff.
• Salary structure: Very Low in comparison to the industry average
– which is usually double the amounts here.

Business level strategies

• No Frills: The underlying business for an LCC is to get a person
from point A to point B. Everything else is luxury items or "frills."
• No free food & beverages: Guests can buy food & drinks at an
affordable price from the website before the flight, or from the
cabin crew.
• Assigned seating: Passengers can select their seats before boarding
the flight according to their preferences.
• Ticketless airline: Passengers need not worry about collecting
tickets before travelling.
• Online check-in: Passengers can check-in online to save time at
the check-in counters, which helps to improve efficiency.
• No refund: Whether or not a guest shows up, the cost of a flight is
the same.
• Lean Distribution System: LCC keeps its distribution channel
very simple that will cover the whole spectrum of the clients.
• Internet Sales, Travel Agents, Call centres.

STRATEGIC MODELS
Core strategies for cost reduction:
• Fuel-efficient aircraft
• New technologies and biofuel to reduce emissions
• Installing winglets to decrease drag and fuel use
• Removing excess weight
• Limit the airplane idling times
The top 3 Costs for any Airlines accumulate due to:
a) Fuel
It is one of the highest operating costs for airlines. With the
understanding that fuel prices won’t drop in the future, the airlines
can sign a contract to buy it for a period at the current rate. Hence
 fuel hedging can be used to manage the operating costs.
b) More seats
The LCCs can charge less for their positions, and thus increase
revenue by increasing the number of passengers. E.g., Boeing
B737-400 aircraft can carry 168 passengers.
c) Labour and maintenance cost
The decision of maintenance by their staff and appointing full-
time labour for minimal jobs should be subjected to the criterion
test periodically to validate the continuation of the practice to enter
the alliance of services.

Approaches for Success include a set of consistent strategies, incentives

for managers achieving on-time performance in their area of
responsibility for desired performance. Efforts should be made to analyze
any repetitive failure issues and immediate recovery. Customer
satisfaction and delight are regarded as the most significant elements. It is
defined as an emotional response that manifests when meeting with any
service. After service is delivered, a positive or negative reaction will be
taken as feedback from the customers.
• Perceived Service Quality is evaluated and examined perfectly by the
actual performance of one service rather than the expected performance
in a specific context.
The higher level of service quality will lead to a higher level of customer
satisfaction and thus, service quality and customer satisfaction are
directly related to each other.
• On-Ground Services are factors that play a significant role in the
aviation context. Ensuring and providing excellent on-ground
services can leave a good impression on customers when they first
get to hear about the airlines. These services consist of getting
information about airports, airlines, flights; reservations ticketing;
check-in processes etc.
• Tangible Factors - In the aviation industry, these constitute the
appearance of staff and cabin crew, in-flight facilities. In the flight,
seat comfort, neatness and cleanliness, presentation of the crew,
equipment such as reading lights, call buttons, air-conditioners, etc.
and entertainment facilities like newspapers, TV screens, video
games, etc. They could also include food and beverages too. These
 factors can play a significant role in generating impressions among
customers which is undoubtedly long-lasting.
• Reliability is vital to the airline industry. It is the dependability
and consistency of services provided. The more prompt the
response, the more reliable and effective is the service. In this
sector, it is the “responsiveness” and ‟ willingness’’ of flight
attendants or ground employees to help passengers. It can also
include prompt handling of complaints, timely service delivery, and
efficiently guiding passengers.
• Empathy-This includes characteristics like understanding,
dedication, sincerity, sensitivity, attentiveness towards customers‟
wants and needs.
This dimension helps to understand the customers efficiently and
improve the service.
• Safety Records -This is the most important factor since it can exert
a substantial effect on the decision making of the customers.
Passengers evaluate the safety records of airlines before booking
since it involves air risks and casualties caused due to weather
conditions, flight crashes, terrorism and even the pilot's own
mistakes.
• Brand Image has been attributed as an indispensable asset that
plays an essential role in the marketing strategy. “Brand names give
an understanding of product quality.” In this industry, the brand
image serves the objective of gaining a competitive advantage to
separate its name, logo, symbol to become exceptional from a
diversity of tough competitors and opponents.
• Approaches for Success-The above factors show how the airline
industry increases the customer base. Employees can be given
training on how to respond to passengers. The method in this regard
is to train extensively and reward positive behaviour by employees.

Strategy analysis
The strategy of positioning has been chosen as a cost leader for analysis
purposes in the LCC segment in the domestic carrier market in India. It is
assumed and perceived that the secondary strategy of reducing fuel costs
and lowering labour/maintenance costs are to be achieved.
Framing of options:
• Fuel hedging for 75% of total fuel consumption and
• Outsourcing maintenance and labour at ten least profitable destinations
will stir IndiGo Airlines to be the Cost leader in the LCC segment in
India.
Core assumptions:
Core assumptions in these strategic options are as follows:
• Fuel hedging will lead to substantial price stability and lessen fuel costs.
• Outsourcing maintenance and labour at less profitable destinations will
streamline operations and enhance profitability.
A. Value test- Since the crude prices are a low historical value, it is
recommended that entering a long-term fuel contract may help offer
a competitive advantage to this airline. Through an ABC analysis
of total destinations of IndiGo, ten destinations have been identified
and they are at the bottom in the performance chart. Hence
operations at these destinations need to be out-sourced which will
help to reduce the cost of services. Thus this strategy passes the
value test.
B. Execution Test. Individual professional Hedging companies in
India offer services at a decent price. These fuel contracts offered
by these various fuel companies are of International standard and
their execution is very feasible in India. The legal framework in
India helps to elaborate agreements relating to outsourcing and
sharing the workforce for sundry jobs. It is observed that the
proposed hypothesis passes the execution test as well.
C. Scalability Test. Fuel hedging can be scaled on a yearly basis. But
these days quarterly fuel hedging contracts are also available. The
scaling of out-sourcing maintenance and other non-core functions
situation is very helpful. This strategy is scalable.
D. Defensible test. The process of fuel hedging and outsourcing is not
innovative, but the way it is implemented can be marked as
differentiation for the Airlines. To finalize hedging contracts and
review performance, top-notch consultants are to be hired.
Operations analytics can be used to get the best solution for the non-
core activities at an unsustainable destination. For a good strategy,
the confidentiality of techniques and tools of analytics and selection
with proper evaluation criteria for continuation with the hedging
 contract firm is maintained.

Value Chain Analysis

CONCLUSION
It was found that most of the passengers are more price-conscious than
quality conscious. The combination of operational performance and
financial engineering has amplified Indigo’s valuation.
Based on the parameters of cost, punctuality, baggage handling, query
handling, Speed of Service Offered, and Less Cancellation by The
Airlines, passengers perceive Indigo as the best Low-cost Airline.
However, throughout the research, it was seen that the Spice jet is in close
competition with the leading carrier Indigo with other Airlines following.
It was also found that although low-cost airline passengers have a highly
favorable perception of low-cost airlines, the highly price-sensitive and
would readily switch to a full-service carrier as it offers a lower fare.
In conjunction with the above findings, the frequency of flights in Indigo
Airlines to a particular destination was the least due to which passengers
were not able to travel from Indigo. However, in terms of least waiting
time to check-in, passengers chose IndiGo as most effective as compared
to other airlines. The primary factors that can attract more people are
effective operations, efficient service, and the brand name.
Secondly, the performance of Indigo airlines with their competitors and
derive lessons to be learnt. It was found that Indigo used six-year sale
and leaseback agreements, so the airline is continuously replacing its
aircraft, preventing the need for overall checks and significant repairs.
Indigo’s on-time performance, with providing consistently low fares and
Courteous and Hassle-free travel, are the reasons for its immense
success. It focused on inorganic expansion by adding a plane every six
weeks with a turnaround time of fewer than 30 minutes. Hence, it can be
concluded that Indigo has the leanest workforce with the staff trained in
every aspect of customer experience at their fly learning and
development Centre. Employees are recognized as Individuals in Indigo
Airlines with the majority of implementation of suggestions given by
them to Indigo Airlines. This is beneficial to both employees as well as
Indigo.

STRATEGIC RECOMMENDATIONS:
• Increase number of destinations served
• Offer low-priced corporate travel packages
• Introduce air cargo service
• Offer flights to unserved destinations through a tie-up with FSC
• value-seeking Segment prefers booking hotels/cabs with flight
tickets so Cross-sell ibis-InterGlobe Hotels (Group synergy)
• Most travelers buy beverages & light snacks at the airport-Price is
a significant deterrent. Tie-up with shops for a discount for IndiGo
customers.
• Booking cabs after flight adds to hassle. Pre-paid cab booking at
destination available before even boarding the flight-cuts down
the hassle.
 References
https://www.goindigo.in/
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aviation
https://www.ukessays.com/essays/tourism/analysis-of-budget-airline-
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http://www.academia.edu/23579703/Competition_and_Strategy_Indigo_A
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Airline-Strategy- Presentation-by-Suddhwasattwa-Mukherjee
https://www.marketing91.com/marketing-strategy-of-indigo-
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management/how-technology-became-indigos-passport-to-
profitability/63104457
https://economictimes.indiatimes.com/industry/transportation/airlines-
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http://www.academia.edu/23579703/Competition_and_Strategy_Indigo_Airlines
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