Connecting the Dots

Successful strategies employed by Indigo

Group O1

Timeline
2006:
33

Commenced operations under InterGlobe Enterprises Pvt. Ltd.

domestic destinations with close to 399 daily flights Commenced international operations; viz..Delhi / Mumbai to Muscat, Kathmandu, Dubai, Singapore and Bangkok

Sept-2011:

2012:

Contemplating starting regional operations

State of the Industry

2002-03:

Moderate competition with two players 2006-07: Intensified competition with entry of low-cost carriers (LCCs); 9 players Higher fuel prices and manpower costs eroded profitability 2007-08: Industry losses of Rs.49 billion; deterioration of capital structure and liquidity crunch Consolidation phase (Air India+Indian; Jet+Sahara; Kingfisher+Air Deccan) Growing market share of LCCs
Increased

capacity utilisation aided efficient players post profits in 2010-11 Source: CRISILResearch

Better Performance.which parameters?

Profitable

even in the bad years of 2008-2010 Net profit estimate of Rs.600 crore on revenues of Rs.3500 crore in 2010-11 Grown at a steady clip addition of eight planes every year Market leader 23.3% market share in 2011-12 Successful foray into the international markets

Cutting Costs
One

service one fleet (63 Airbus A320s) Higher fuel efficiency Alliance with Airbus for maintenance Asset light leasing model IndiGo has 96 employees per aircraft; lean-and-mean vis-vis to Air India's 250 a plane Only Indian airline to adopt RNP approach: Fuel and cost savings; Faster turnaround at airports Gradual expansion Lower flight to market ratio Competitors have only been low fare and not low cost

Differentiating Service
Cheap
Great Clean

tickets

on-time performance and fresh airline service a differentiator simple promises and KEEPING them too

Making

Trusted

brand - high quality at lower fares

Overall Low Cost

Best Cost Provider

Broad Differentiation

Focused Low Cost

Focused Differentiation

Backbone
Meticulous

planning

Route selection For international foray - the network planning, marketing, training and product definition began even before completion of 5 years

Appropriate flight timings strict check-in times of hotels in

Singapore and Bangkok

Domestic strategy extended

Backbone.contd
Motivated

workforce

Among top 50 best work places in India Lowest attrition in the industry Face of the company in advertisements Employees working in multiple roles

Backbone.contd
Financial

prudence

Low dependence on debt Asset light leasing model

Effective

communication

Competitive Advantage
Resources Aircraft HR Fuel Brand Equity Operations Valuable Y Y Y Y Y Rare N Y N Y Y Costly to Imitate N N N N Y

Exploited by the Organisation Y Y

Y Y Y

Risks
Domestic

competition set to intensify with FDI nod (AirAsia Tata JV) High competition in the international sector AirAsia, Air Arabia, and Air India Express Poaching of employees Availability of pilots and skilled personnel Point-to-point carrier Extensive government interference ATF fuel prices

Opportunities
Indian
Going

market still under-tapped

regional - smaller cities of the current strategy

Extension

Going strong and interesting times ahead..

Thank you.Group O1