ABSTRACT

Success of indigo
airlines.
In a difficult industry
where most other
airlines were making
losses, what
capabilities did Indigo
develop? Are these
sustainable? Will it
need to change its
competitive
positioning?

INDIGO AIRLINES
Submitted by: B04

Amandeep Singh (H18069)

Narayana Aaditya (H18088)
Parnika Singhal (H18094)
Rizu Khanwilkar (H18101)
Sarbajit Das(H18105)
Shalini Jha(H18107)
 1. VRIO ANALYSIS OF INDIGO AIRLINES:

INIMITABLE/
NON-
LIST OF RESOURCES VALUABLE RARE SUBSTITUTABLE ORGANIZED SCA
TANGIBLE RESOURCES
Good connectivity across cities     
Govt. facilitated maximum fuel import
limit for the airlines     
One of the first airlines to gain permit
for flying internationally     
INTANGIBLE RESOURCES
More airtime due to operational
efficiency     
Higher turnaround time with respect
to competitors     
Effective HR management     
Customised role specific training
programs     
CAPABILITIES
On-time performance     
Modern navigation performance
approach     
Special emphasis on IJP(internal job
posting) and internal job promotion     
Reduction of greenhouse gases     
Consistent on-boarding and off-
boarding     
Optimising heating equipment &
cutlery time     
Hub-spoke model     
Reduction in check-in time due to
separate check-in of hand baggage     
High fleet efficiency management due
to low flight to market ratio     
Poaching strategy from rival airlines
to save training costs     
Higher operational efficiency and low
cost     
On time arrival and departure     
On-time performance focused
marketing campaign     
Less grounding time     
Cost saving due to more efficient
aircrafts     
 2. OBJECTIVE, ADVANTAGE AND SCOPE:
Objective Advantage Scope
To retain the title of
Operational
the domestic market
efficiency along with
leader in the Aviation Operates in Hybrid
Hub and Spoke
Industry and segment and Low
structure that
replicate the cost segment
reduces the cost to a
successful strategies
great extent.
Internationally

3. PESTLE ANALYSIS:

Political
•Introduction of Open Skies Policy due to which many private players entered the market
which ended the monopoly of Air India and Indian Airlines

Economic
•Promotion of Foreign Investments wherein FDI was allowed up to 49% in the Indian Aviation
Industry.
• Import of Aviation Turbine Fuel (ATF )was permitted and Indigo was the major beneficiary of
this.

Social
• Switching to Low Cost Carriers(LCC) due to increase in per capita income

Technological
•Single class configuration aircraft that reduced training & maintenance costs.
•Higher efficiency by reducing grounding time & lesser average age of the fleet.
•Among the first to introduce modern navigation performance approach enabling shorter
trajectory for landing saving on fuel costs.

Legal
•Domestic airlines were given permits to operate internationally, Indigo capitalised by
commensing daily international flights.
•Maximum fuel import limit was granted to Indigo

Environment
•Their use of modern navigation performance approach helped in reducing fuel consumption
and emissions of green house gas(GHG) emissions
 4. SWOT ANALYSIS:

Strengths: Weakness:
1) Positive image of a low cost carrier that 1) Reservation about the safety of the
provided high quality of service aircrafts and the quality of the pilots after the
2) Skill specific as well as role specific incident involving bumpy landing
training 2) Lesser Innovations
3) Customized training programs for pilots 3) Lack of long term alliances
aligned with the culture of Indigo which
emphasised on safety 4) Market expansion is limited wherein they
haven’t trapped into domestic cargo
4) Hub and Spoke model enabled indigo to segment
capture considerable market share even
though they had relatively smaller fleet size 5) Large number of competitors
5) Indigo’s use of Airbus helped save fuel by
significant percentages
6) Indigo avoided carrying extra cutlery and
equipment which made the aircraft lighter,
thus reducing ATF cost

SWOT

Opportunity:
1) Freight market could be tapped
2) Increase in number of working class
people and professionals
3) Increase in customers due to increase in
capacity to spend
4) Regional connectivity is high
5) Poaching of pilots from rivals to save on
training costs
6) Maximum fuel import limit awarded by
the government
7) First mover advantage in daily
international flights
Threats:
1) Volatile oil prices: low prices prevalent in
the market making A320neo irrelevant
2) Leasing strategy has been replicated,
moreover it is unviable for the purpose of
accounting
3) High competition in international market
4) High ATF prices and labour cost are a
threat to the profits
5) Poaching by competitors
6) Economic slowdown
7) The lack of well-trained pilots
8) The positioning attempt of hybrid carrier
from LCC model is giving out mixed signal

RECOMMENDATIONS:
 The model is not sustainable in the long term as the concept is imitable and other airlines may
follow the path initiated by Indigo
 Hybrid strategy could be leveraged to capture large number of customers as people might not
prefer travelling in low cost carriers
 Capture new customers via Social Media Marketing and Targeted Electronic Device Mailers(EDMs)
 Provision of loyalty discounts to frequent flyers
 Increase in Above the Line (ATL) Marketing expenditures to increase brand awareness