Analyze the current strategic position of Indigo. Have there been any changes in the competitive strategies it has followed since 2006?

Analyze the current strategic position of Indigo. Have there been any changes in the competitive strategies it has followed since 2006?

Indigo based its domestic development on a cost focus strategy. If Indigo succeed to become a leader in Indians airlines market, it’s due to an original model of development. The company has been able to set up a low cost model, providing basic services and investing a very low budget on marketing and promotional activities. It only counts on the publicity by word of mouth and on its on-time reputation. Indigo took every decision in order to reduce costs, for instance it decided to have only one type of aircraft that reduce its training and maintenance costs.

Pay less to train pilots

Every decision is taken to reduce cost and one of its major expense was on the training and certification of new inducted pilots. So it decided to find a way to reduce this cost. The solution found was to poach pilots from competitors. Indeed, in 2011, Kingfisher a competitor of Indigo was unable to pay the salary of its pilots so Indigo decided to offer them a job in the company with a bonus equivalent to their unpaid salaries. Those pilots already have a certification and experience, so the training for them was shorter and allowed to save a lot of money. This strategy has change in 2011 when they hire 450 additional pilots for years next. Índigo decided to work with CTC in order to be sure that its pilots would ne well trained. The company also decided to upgrade some pilots to commander in order to have a better trained fleet thanks to CTC training.

New pricing strategy,

At the beginning Indigo started as a low cost player in Indian market. It decide to change its positioning from a low cost company to a hybrid player offering low prices but closer to its competitors. Indeed, as we can see in the exhibit 13, IndiGo offer a New Delhi - Hyderabad at 6,105 roupies the same price than Spice jet or a New Delhi - Mumbai at 5,999 roupies more than Kingfisher Class. But this situation can be explained by best performance in terms of customer satisfaction : one of the best on-time performance and humble service.

To maintain on-time performance Indigo invest in a new check-in system for passengers traveling without luggage. They can check-in quickly without being stranded in queue. Moreover it trained its staff to offer a good services to their customers and have a great brand image in their eyes.

More aircraft acquisition

When Indigo started it buy only one aircraft and every six month it buy one more. It wanted to be well establish in one market and then extent to another one.

But since bulk ordering of planes became more convenient in 2012 Indigo decided to order 100 Airbus-320 to be delivered gradually. In 2014, Indigo ordered 250 extra A320. It shows their impact in the Indian market.

International diversification :

In 2011 it decided to dedicate 16% of its fleet to International routes starting with neighboring countries. But the competition was different than in the domestic.

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