BUSINESS POLICY (601)

BBA SEM VI

SUBMITTED BY: Deepali Ailani

Kiran Chauhan
Mohit Gupta
Nitin Chawla
Harsh Mangal
INDIGO AIRLINES
 INTRODUCTION
• IndiGo is a private, low-cost carrier based
in Gurgaon, Haryana, India.
• The airline started operations in August 2006
and currently is the largest airline in India by
market share.
• The airline is also one of the fastest growing
airlines in the world.
 ABOUT THE COMPANY
• IndiGo was set up in early 2006 by Rakesh S Gangwal,
a USA-based NRI and Rahul Bhatia of InterGlobe
Enterprises.
• InterGlobe holds 51.12% stake in IndiGo and 48% is held by
Gangwal's Virginia-based company Caelum Investments.
• IndiGo placed a firm order of 100 Airbus A320-200 aircraf
during June 2005 in plans to commence operations in mid-
2006.
• IndiGo took delivery of its first Airbus A320-200 aircraf on
28 July 2006, nearly one year afer placing the order, and
commenced operations on 4 August 2006 with a service
from New Delhi to Imphal via Guwahati.
 DESTINATIONS
• IndiGo operates to 33 destinations in India and abroad
with 399 daily flights.
• Unlike most low cost carriers, IndiGo uses a hub and
spoke model used by full service airlines where the
airline flights to different destinations are routed
through its hub.
• In January 2011 IndiGo received a license to operate
international flights afer completing five years of
operations.
• IndiGo's first international service was launched
between New Delhi and Dubai on 1 September 2011.
STRATEGIES FOR FARE REDUCTION

• Being a low-cost carrier, none of IndiGo's

flights have Business class or First
class sections. It offers only Economy
class seating.
• To keep fares low, IndiGo does not provide
complimentary meals in any of its flights,
though it does have a buy-on board in-flight
meal programme.
WHY IT IS THE MARKET LEADER
• Indigo's stuck to its low-cost, single class model unlike rivals Jet
Airways.
• Selling and leasing back planes helps its balance sheet
• Quality and detail key to good service
• It’s all about customer focus
• Using technology smartly
 MARKET LEADER STRATEGIES
• Mobile: Online ticket booking,
special assistance for minors,
arranging wheelchairs, new
mobile application for checking
flight status, pre-booked seats and
meals on flight
• Pre emptive: Indigo placed the
largest order in commercial
history during 2011 with Airbus
for 180 aircrafts, keeping in
mind future competition
• Position: Tagline-‘On-time, Low
Fares, Courteous, Hassle-Free,
Low Cost Airlines’
 FUNCTIONAL STRATEGIES
• One type of airplane –brand-new Airbus A320
• One type of fare-low
• One type of customer services-professional
• One way to deal with delays and cancellations-honesty
• Go local-connect with the middle class
• Focus on core competencies and market them
• Aim to compete with Railways in the long run
• Synergies in offering value added services-Holiday packages/visa
services
 PRICING STRATEGIES
• Low cost and high quality of service
• Price to be differentiated with respect to days before the travel.
• High seating density and load factor
• Being a low-cost carrier, none of Indigo's flights have Business
class or First class sections. It offers only Economy class seating.
• To keep fares low, Indigo does not provide complimentary
meals in any of its flights, though it does have a buy-on board in
flight meal programme.
• Targeting segments locally based on seasons and festivals
 STRATEGIC OBJECTIVES
• Increase number of destinations / frequencies served resulting in
market leadership
• Top/ of the mind brand in indian aviation industry for AFFORDABLE
QUALITY SERVICES
• MARKET LEADER in terms of share in the travel industry
• Introduce and sustain business travel segment for cost conscious
and young professionals
COMPETITORS
 COMPETITIVE RIVALRY
• Very little product differentiation in Services
• Mature Industry- Only scope for growth by gaining other
people’s market share
• High bargaining power of suppliers
• No sense of brand loyalty amongst customers and can
easily switch to other airlines
SWOT ANALYSIS
 STRENGHTS
• 1.Low fares
• 2.High Service Quality
• 3.Operational Efficiency
• 4.Customer Service
• 5.Fuel Efficient Aircrafts
• 6.High brand awareness
• 7.Flights are available to customers when
• required
 WEAKNESSES
• 1.Less differentiation
• 2.Short lived innovations
• 3.Untapped domestic cargo segment
• 4.No established alliances
• 5.Lack of product depth and breadth
 OPPORTUNITIES
• 1. Increasing middle class population
• 2. Increase in domestic tourism
• 3.Chartered Services
• 4.An aviation consulting firm estimates the
• cargo services of 3.4million tonnes per annum.
• 5. Largest market share among LCCs in Indian
• Market
 THREATS
• 1. High ATF prices
• 2.Economic slowdown
• 3.Government policies
• 4. Technological advancement in communication
• 5.The shortage of trained pilots, co-pilots and ground staff is
• severely limiting the growth prospects of all the airline
• companies.
 CONCLUSION
• Low cost airlines have huge potential in the Indian market
there are many players entering the market targeting at price
sensitive segment.
• Open sky policy and deregulation have further open space
for many players to enter the market.
• Indigo has successfully implemented the low cost strategy
with its value added services but still it has huge potential to
capture more market if it can establish itself internationally ,
expand its service to the cargo .
• It also has initiated various services to the society such as
• “indigo reach” is the CSR programme focus mainly on
education, environment, and women.