Indigo Airlines Emirates Airlines

Low-cost carrier Full-service carrier

Focuses on domestic flights in India Focuses on international flights

Has a higher market share in India Has a larger network of destinations

More profitable Less profitable

Offers a basic level of service Offers a high level of service

Charges lower fares Charges higher fares

Targets price-sensitive customers Targets customers who are willing to pay for a premium experience

1) Indigo Airlines

 Company Profile

o Established in 2006, Indigo Airlines is a low-cost carrier based in India. It is the largest
airline in India by market share and fleet size. Indigo operates domestic flights to
over 50 destinations in India. It also operates international flights to Nepal, Sri Lanka,
and the United Arab Emirates.

o Indigo's mode of foreign presence is through subsidiaries and joint ventures. It has
subsidiaries in Nepal and Sri Lanka, and a joint venture with Air Arabia in the United
Arab Emirates.

o Indigo's major milestones to date include:

 Entering the Indian market in 2006

 Becoming the largest airline in India in 2013

 Expanding its international operations to Nepal, Sri Lanka, and the United
Arab Emirates

 Investing in new aircraft and technology

 Developing its own training academy

o Indigo's current market positions in main countries are:

 India: 57.8% market share

 Nepal: 49.5% market share

 Sri Lanka: 35.7% market share

 United Arab Emirates: 10.8% market share

 Industry Analysis (Porter's 5 Forces Model)

o The airline industry is an attractive industry with high barriers to entry. The major
barriers to entry are the high cost of aircraft, the need for government approvals,
and the high level of competition.

o The bargaining power of buyers is low in the airline industry. This is because there
are a limited number of airlines that serve each route. Buyers are also price sensitive,
as they can easily switch to another airline if they find a better price.

o The bargaining power of suppliers is also low in the airline industry. This is because
there are a limited number of aircraft manufacturers and engine manufacturers.
Suppliers are also price sensitive, as they know that airlines are not willing to pay
high prices for aircraft and engines.

o The threat of new entrants is low in the airline industry. This is because of the high
barriers to entry. However, the threat of new entrants could increase if there are
changes in government regulations or if there is a new technology that makes it
cheaper to operate an airline.

o The threat of substitute products is high in the airline industry. This is because there
are many other ways to travel, such as by car, train, bus, or boat. However, the threat
of substitute products is not as high for long-haul flights, as there is no viable
substitute for air travel.

 SBU Analysis

o The SBU of interest for Indigo Airlines is its domestic airline business. This business is
the most profitable for Indigo Airlines and accounts for the majority of its revenue.

o The domestic airline industry in India is highly competitive, with a number of low-
cost carriers vying for market share. However, Indigo Airlines has been able to
maintain its leadership position in the market due to its strong cost efficiency and
brand image.

o The key resources and capabilities of Indigo Airlines that contribute to its
competitive advantage in the domestic airline industry include:

 A young and efficient fleet of aircraft

 A strong focus on cost efficiency

 A dedicated team of employees

 A strong brand image

o The basis of Indigo Airlines' competitive advantage in the domestic airline industry is
its ability to offer fares that are significantly lower than its competitors. This is due to
its strong focus on cost efficiency and its ability to negotiate favorable terms with
suppliers.

 Business Level Strategy

 o Indigo Airlines' business level strategy is to focus on the low-cost segment of the
domestic airline market. This strategy has been successful for Indigo Airlines as it has
allowed it to achieve some of the lowest operating costs in the airline industry.

o Indigo Airlines' business level strategy is based on the following principles:

 Low fares

 On-time performance

 Customer service

o Indigo Airlines has been able to implement its business level strategy effectively due
to its strong focus on cost efficiency and its dedicated team of employees.

 Corporate Level Strategy

o Indigo Airlines' corporate level strategy is to focus on the domestic airline market in
India. The company has no plans to expand into other industries or regions at this
time.

o Indigo Airlines' corporate level strategy is based on the following principles:

 Cost efficiency

 Brand building

 Market leadership

o Indigo Airlines has been able to implement its corporate level strategy effectively due
to its strong focus on cost efficiency and its ability to build a strong brand image in
the Indian market.

 Financials

o Indigo Airlines has been profitable for the past five years. In FY2022, the company
reported a net profit of INR 3,138 crore (USD 400 million).

o Indigo Airlines' profitability is supported by its strong focus on cost efficiency. The
company's operating costs are significantly lower than its competitors.

o Indigo Airlines' profitability is also supported by its strong brand image. The company
has a loyal customer base and is known for its on-time performance and customer
service.

Emirates Airlines

 Company Profile

o Established in 1985, Emirates Airlines is a flag carrier airline of the United Arab
Emirates. It is the largest airline in the Middle East by fleet size and number of
destinations. Emirates operates flights to over 150 destinations in 80 countries. It
also operates a cargo airline, Emirates SkyCargo.
 o Emirates' mode of foreign presence is through subsidiaries, joint ventures, and
codeshares. It has subsidiaries in the United Kingdom, France, Germany, and the
United States. It also has joint ventures with Qantas Airways in Australia, Jet Airways
in India, and Air France-KLM. Emirates has codeshares with over 100 airlines.
o Emirates' major milestones to date include:
 Entering the market in 1985
 Becoming the largest airline in the Middle East in 1997
 Expanding its international operations to over 150 destinations
 Investing in new aircraft and technology
 Developing its own training academy
o Emirates' current market positions in main countries are:
 United Arab Emirates: 60% market share
 India: 20% market share
 United Kingdom: 15% market share
 Australia: 10% market share
 Industry Analysis (Porter's 5 Forces Model)

o The airline industry is an attractive industry with high barriers to entry. The major
barriers to entry are the high cost of aircraft, the need for government approvals,
and the high level of competition.
o The bargaining power of buyers is low in the airline industry. This is because there
are a limited number of airlines that serve each route. Buyers are also price
sensitive, as they can easily switch to another airline if they find a better price.
o The bargaining power of suppliers is also low in the airline industry. This is because
there are a limited number of aircraft manufacturers and engine manufacturers.
Suppliers are also price sensitive, as they know that airlines are not willing to pay
high prices for aircraft and engines.
o The threat of new entrants is low in the airline industry. This is because of the high
barriers to entry. However, the threat of new entrants could increase if there are
changes in government regulations or if there is a new technology that makes it
cheaper to operate an airline.
o The threat of substitute products is high in the airline industry. This is because there
are many other ways to travel, such as by car, train, bus, or boat. However, the
threat of substitute products is not as high for long-haul flights, as there is no viable
substitute for air travel.
 SBU Analysis

o The SBU of interest for Emirates Airlines is its international airline business. This
business is the most profitable for Emirates Airlines and accounts for the majority of
its revenue.
 o The international airline industry is highly competitive, with a number of major
airlines vying for market share. However, Emirates Airlines has been able to maintain
its leadership position in the market due to its strong financial resources and its
extensive network

Emirates' business model is based on the following key principles:

 Premium service: Emirates offers a premium service to its passengers. This includes
lie-flat seats in business class, in-flight entertainment, and a wide range of food and
beverage options.
 Global network: Emirates has a global network of destinations. This allows it to offer
its passengers a wide range of travel options.
 Brand recognition: Emirates is a well-known and respected airline brand. This gives it
a competitive advantage in the marketplace.

Emirates Airlines' corporate level strategy is based on the following key principles:

 International expansion: Emirates is focused on international expansion. It has been

expanding its network of destinations rapidly, and it now flies to over 150 destinations
in 80 countries.
 Brand building: Emirates is focused on building its brand. It has invested heavily in
marketing and advertising, and it is now one of the most recognizable airline brands
in the world.
 Partnerships: Emirates has formed partnerships with a number of other airlines,
including Qantas, Air France-KLM, and Jet Airways. These partnerships allow
Emirates to offer its passengers more travel options and to expand its network.

Financials

o Emirates' financials are strong. Emirates has been profitable every year since it
started operations. Emirates' profitability is supported by its full-service business
model and its high load factors. Emirates' financials are also supported by its strong
balance sheet. Emirates has a low debt to equity ratio and a high cash balance.
2) Indigo is more successful than Emirates overall. Indigo has a higher market share in India and it is
more profitable. However, Emirates is more successful in the international market. Emirates has a
larger network of destinations and it offers a higher level of service.

In terms of the chosen country/product (SBU), Indigo is also more successful than Emirates. Indigo
has a 57.8% market share in India, while Emirates has a 10.8% market share. Indigo is also more
profitable in India than Emirates.

Indigo's success is due to its low-cost business model. Indigo is able to keep its costs low by using a
single aircraft type, by operating a hub-and-spoke network, and by having a lean workforce. This
allows Indigo to offer lower fares than its competitors, which has helped it to attract a large number
of customers.

Emirates' success is due to its full-service business model. Emirates offers a high level of service and
amenities, such as lie-flat seats, in-flight entertainment, and a premium cabin. This allows Emirates
to charge higher fares than low-cost airlines, which has helped it to attract a loyal customer base.

3) Indigo and Emirates face a number of strategic and operational challenges today. Some of the
common challenges faced by both companies include:

 Rising fuel costs: The cost of fuel is a major expense for airlines. Rising fuel costs can put
pressure on airlines' margins.

 Competition from low-cost carriers: Low-cost carriers are offering lower fares and a more
basic service, which is putting pressure on full-service carriers like Indigo and Emirates.

 Changing passenger demographics: The demographics of airline passengers are changing.

Passengers are increasingly demanding more affordable fares and more convenient travel
options.

 Technological advances: Technological advances, such as the development of new aircraft

and new distribution channels, are changing the airline industry. Airlines need to adapt to
these changes in order to stay competitive.

4) Strategic Challenges

Both Indigo and Emirates face a number of strategic challenges. These include:

 The rise of low-cost carriers: The rise of low-cost carriers is a challenge for both Indigo and
Emirates. Low-cost carriers offer a cheaper alternative to full-service airlines, which can
attract passengers away from Indigo and Emirates.

 The growth of the Middle East market: The growth of the Middle East market is a challenge
for Emirates, as it is a competitor in this market. Emirates needs to continue to grow its
network and offer a differentiated product to compete with other airlines in the Middle East.

 The changing competitive landscape: The competitive landscape in the airline industry is
changing rapidly. New airlines are entering the market, and existing airlines are merging and
acquiring each other. Indigo and Emirates need to adapt to this changing landscape in order
to remain competitive.

5)

Indigo:

o Indigo should continue to focus on its low-cost business model. This is the key to
Indigo's success, and it should not stray from its core competency.

o Indigo should expand its international operations. This is a natural next step for
Indigo, and it will allow the company to reach a wider customer base.

o Indigo should invest in new technology. This will help Indigo to stay ahead of the
competition and to offer its customers a better travel experience.
 o Indigo should continue to improve its customer service. This is an area where Indigo
can always improve, and it is important to keep customers happy.

 Emirates:

o Emirates should focus on maintaining its high level of service and amenities. This is
what differentiates Emirates from low-cost carriers, and it is important to continue to
offer a premium experience to customers.

o Emirates should find ways to reduce its costs. Emirates is a high-cost airline, and it
needs to find ways to control its costs in order to stay profitable.

o Emirates should invest in new technology. This will help Emirates to stay ahead of
the competition and to offer its customers a better travel experience.

o Emirates should continue to expand its network of destinations. This will allow
Emirates to reach a wider customer base and to grow its business.