Download - Indigo Airlines Strategy
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Case: Indigo Airlines
Group-7Section-A
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How is a low cost carrier (LCC) different from a full service airline
(FSA)?• Point to point flights at secondary airports: avoiding investment in transfer passenger
traffic and saving on airport charges• Single type fleet: savings on aircraft maintenance and flight crew training costs• Single class cabin with lower seat pitch: increase in number of aircraft seats,
typically by 15%or more,• Baggage restrictions, unassigned seating and minimal in-flight services: reductions in
turnaround time and increase in ancillary revenues • Using direct sales with heavy emphasis on internet: savings in sales & distribution
costs• Minimal ground services and outsourcing most non-flight operations: savings on
airport fees and administrative costs
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Indigo is part of the industry which historically has suffered great losses. However, Indigo has become
the most profitable airline in the industry very quickly? Explain
• IndiGo, India’s largest airline by passengers carried, reported a more than six fold increase in profit to Rs. 787 crore for 2012-13
• The airline has increased its fleet capacity by 39% since last year(70 planes), while the overall industry capacity shrunk by 4%
• Deployed 28% of its capacity and handled 27% more passengers in 2012-13, while the overall industry’s passenger traffic fell by 5%.
• IndiGo’s customer ratings are high, service delivery is consistent with quality maintained, operating and financial measurements are best in the industry
• Overall, IndiGo continues to focus on their business plan with strategic clarity and has demonstrated high execution ability
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Analyse the strategic positioning of Indigo?
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What are the key sources of competitive advantage for Indigo?
• Indigo's stuck to its low-cost, single class model unlike rivals Jet and Kingfisher
• It implemented hub and spoke model.• Selling and leasing back planes helps its balance sheet.• Quality and detail key to good service-airline employs fewer people, with
one of the industry's leanest work forces.• on-time performance is diligently monitored for every flight in real time via
radio or satellite called Aircraft Communications Addressing and Reporting System (ACARS)
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Thank You