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  • INDIGO

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    Shreysha Sah
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    The document discusses Indigo's business model, costs, and recent financial performance. It uses a sale and leaseback model with a single fleet of older aircraft to keep operations simple. Rising fuel costs, currency fluctuations, and grounded planes hurt Indigo's profits in Q1. To address this, Indigo plans to own older aircraft outright rather than lease them and add more fuel-efficient planes on new domestic and international routes to maintain competitive fares. Charts show Indigo's growing net profits compared to losses at Jet Airways and steady profits at SpiceJet over recent years.

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    The document discusses Indigo's business model, costs, and recent financial performance. It uses a sale and leaseback model with a single fleet of older aircraft to keep operations simple. Rising fuel costs, currency fluctuations, and grounded planes hurt Indigo's profits in Q1. To address this, Indigo plans to own older aircraft outright rather than lease them and add more fuel-efficient planes on new domestic and international routes to maintain competitive fares. Charts show Indigo's growing net profits compared to losses at Jet Airways and steady profits at SpiceJet over recent years.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    14 views7 pages

    INDIGO

    Uploaded by

    Shreysha Sah
    The document discusses Indigo's business model, costs, and recent financial performance. It uses a sale and leaseback model with a single fleet of older aircraft to keep operations simple. Rising fuel costs, currency fluctuations, and grounded planes hurt Indigo's profits in Q1. To address this, Indigo plans to own older aircraft outright rather than lease them and add more fuel-efficient planes on new domestic and international routes to maintain competitive fares. Charts show Indigo's growing net profits compared to losses at Jet Airways and steady profits at SpiceJet over recent years.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 7

    Submitted by,

    Group 3:
    Nandu Jaya Kumar
    Shreysha Saha
    Sravanthi Bhogela
    Nikhil More
    UNDERSTANDING THE
    BUSINESS
    BUSINESS MODEL
    • Sale and Leaseback Model
    • Single fleet – No frills Model
    • Fleet size
    • Fleet age
    • Operations simpler compared to its peers
    • Turnaround time is minimum
    • Debt is aircraft related and there are no working capital debt
    MAIN COSTS
    • Fuel costs
    • Employee costs
    • Aircraft costs
    • Ownership costs
    • Operating costs
    • Airport costs
    • Navigation costs
    • Passenger handling costs
    INDIGO Q1 LOSSES
    • Rise in fuel prices
    • Weakening of rupee- Forex losses
    • Grounding of a large number of A-320 Neos due to engine problem
    led to cancellation of flights
    • Competitive fare environment
    STEPS TAKEN BY INDIGO
    • Aircrafts with fleet age of more than 6-7 years would be owned by the company
    rather than leasing them
    • Moved to more fuel efficient aircrafts
    • Increased its capacity to new routes and destinations domestically and connected
    international destinations to various cities in India
    • These additions could keep fares under check and prevent pass through of costs
    Net Profit over the years(in crores)
    Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
    indigo 474.44 1304.17 1986.16 1659.19 2242.37
    jet airways -3677.85 -1813.71 1173.56 1482.52 -767.62
    spice jet -1003.24 -687.05 449.79 430.73 566.66

    NET PROFIT OVER THE YEARS


    3000

    2000

    1000

    0
    Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

    -1000

    -2000

    -3000

    -4000

    indigo jet airways spice jet

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