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Indigo Airline

TD : Indigo Airline. Recherche parmi 300 000+ dissertations

Par   •  26 Mars 2019  •  TD  •  623 Mots (3 Pages)  •  388 Vues

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Low cost carrier (LCC) operating system is generally defined by the following factors:

These factors are what differentiate LCCs from Full service aircrafts (FSA)

  • LCCs operate mainly with load factor rather than yield factors
  • Single class configuration aircrafts
  • Low airfare
  • No in flight service free of charge
  • Single fleet aircraft
  • Use of secondary airport
  • Hub and spoke model : passengers are first taking big carrier going to the biggest airport then taking smaller planes to reach their destinations

        However, India has its own noticeable specificities regarding LCCs:

  • No single fleet aircraft like in developed countries
  • No secondary airports
  • Therefore, heavy traffic congestion made carriers hover over the airport increasing the cost of fuel
  • Many companies not using hub and spoke model

Single class configuration aircrafts remain pretty recent

Indigo Airlines

Competition

  • Aircrafts
  • Plane Maintenance
  • Brand of plane
  • Hours of flight per day
  • Passengers
  • Time performance
  • Pilots
  • Landing system
  • Turn Around Period

Buying and selling aircrafts in short time (Max : 2 years) and added aircrafts regularly

Contract with Airbus for immediate maintenance

Airbus for fuel efficiency

+12 hours of flight a day

Load factor : 160 to 190

ACARS automated system monitored on-time performance

Hiring trained pilots

Fuel efficient and fast landing system

About 20 minutes

Owning Aircrafts for longer times (Min : 6 years) and buying a bunch at once

Internal engineers or waiting for Airbus

Boeing

No more than 10

No more than 150

Human interference and manipulation

Hiring then training pilots

Slower landing system

More than 30 minutes

Michael Porter explained there are two ways for a source competitive advantage, to be a low cost leader, which is the case for Indigo Airlines, or to be a differentiator. Indigo Airlines obviously chose to be a cost leader, but could they manage to sustain a key source competitive advantage in the long run ?

Yes : Sustainable Success

No : Potential Problems

  • Indigo never owned an aircraft, they would buy and sell them to intermediaries, or get a lease, that way they always had young aged planes
  • Reduced Training and maintaining cost by keeping a single configuration aircraft
  • Contract with Airbus for repairing technical problems instead of hiring internal engineers.
  • Purchasing Airbus Place for higher fuel efficiency to reduce cost on fuel (ATF)
  • Acquiring fuel-efficient technologies for short trajectories, for saving fuel and more usage of time
  • Gradual international expansion, market by market
  • Avoided carrying cutlery and heating equipment for their added weight
  • The hub and spoke model helped serve more markets with fewer fleets
  • Mouth to mouth publicity with excellent customer service, which reduced marketing costs
  • On-time performance reputation with ACARS System
  • Satisfactory HR management, approachable CEO, “walk the talk” philosophy, and always hiring internally
  • Poaching pilots from competition to save on training costs, and lean management approach for less staff on a plane
  • Positive Macro Environment changes that permitted fuel import and flying internationally
  • Challenges with the international market where Indigo doesn’t have as much experience and the competition is high
  • Indigo changed its positioning from low cost to hybrid which could damage its brand image
  • Suspicious safety records
  • Questionable pilot training
  • Leasing fleets seen as a less than innovative strategy

Current strategy of IndiGo :

  • Short flights
  • Don’t own any of the aircrafts
  • Technical issues on aircrafts are solved by external entities
  • Make sure that almost every flights are on time
  • Each flight is expected to be “full”
  • Reduce the landing trajectory and save fuel during the flight - Efficiency
  • Low-cost services on-board like Ryan Air
  • Indigo’s strategy is established on wanting to be a cost leader, every change they made and every strategy they took was to cut costs
  • But starting from 2012 they tried repositioning themselves as a hybrid of sorts, being at the same time a low cost carrier, while also providing higher priced fares and services

...

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